[2025] UKUT 00367 (TCC)

The Applicant’s submitted grounds of appeal in the application to the UT for permission to appeal and notice of appeal dated 28 April 2025. The grounds relied upon at the hearing were contained in the skeleton argument dated 7 October 2025. They include the following submissions:

“II. GROUNDS OF APPEAL

4.The Appellant contends that the Tribunal erred in law in its interpretation and application of the Coronavirus Job Retention Scheme (“CJRS”) Treasury Directions, specifically:

a.

Misinterpreting paragraph 8(1) of the First CJRS Direction, particularly the phrase “reasonably expected to be paid”;

b.

Failing to apply a purposive construction to the CJRS scheme, which was designed to provide emergency support to employers during the COVID-19 pandemic.

c.

Overlooking the broader legislative intent and context of the CJRS, which should inform the interpretation of eligibility criteria. Impact of BT Group Plc’s Delay

5 The employer’s financial prudence is further evidenced by the impact of BT Group Plc’s failure to comply with a High Court judgment. In 2007, the High Court ruled in favour of the employer in a copyright dispute against BT Group Plc. After years of correspondence, BT conceded in April 2025, yet has failed to make payment. The matter has now been referred to the Attorney General, Rt Hon Lord Richard Hermer KC and Rt Hon Liz Kendall MP Secretary of State for Science Innovation & Technology. This unresolved liability has placed significant strain on the employer’s financial resources, directly affecting its ability to meet payroll obligations. The employer’s decision to submit £0.00 RTI returns was a protective and legally

sound response to this uncertainty, not a reflection of ineligibility or bad faith.

III. LEGAL FRAMEWORK AND AUTHORITIES

Interpretation of the CJRS Treasury Directions

6 The CJRS Treasury Directions must be interpreted as a unified and purposive scheme. Paragraph 5 sets out the gateway eligibility conditions for employees, while paragraph 8(1) imposes a substantive requirement that the employer must have a “reasonable expectation” of paying the amount claimed to the furloughed employee. These provisions are not discrete; they are complementary and must be read together in light of the scheme’s overarching objective—to support the retention of employment during periods of economic disruption.

Paragraphs 2.1 to 2.5 of the Directions reinforce that paragraph 8(1) is integral to the scheme’s purpose, which is to reimburse employers for employment costs that are either actually incurred or reasonably expected to be incurred as a result of furlough. Accordingly, paragraph 5 determines eligibility, while paragraph 8(1) ensures that claims are grounded in genuine financial obligations. A harmonious reading of these provisions is essential to give proper effect to the legislative intent underpinning the CJRS.

7 The Appellant acted in good faith and with financial prudence. RTI submissions of £0.00 were a protective measure, not indicative of ineligibility. The employer had a genuine expectation of payment, supported by:

a.

Contractual obligations from a key debtor.

b.

Correspondence confirming anticipated payment.

IV. LEGAL PRECEDENTS

Purposive Interpretation of Statutory Schemes

8.

KNR Flooring Ltd v HMRC [2025] UKFTT 526 (TC): The Tribunal accepted that salary adjustments made for operational reasons, and supported by contemporaneous records, could satisfy the 'reasonably expected to be paid' condition under paragraph 8(1).

9.

Josoemag Services Ltd v HMRC [2024] UKFTT 744 (TC): The Tribunal upheld claims where employers demonstrated a reasonable expectation of payment, even if actual payment was delayed due to external factors such as debtor non-performance

….”