[2025] UKUT 00377 (TCC)

Ms Duncan submits that the Applicant was an unrepresented litigant facing very serious allegations. In light of that, the FTT did not identify or pursue clarification of material matters which an inquisitorial Tribunal should have explored, including:

She argues that the absence of any active fact finding or questioning of HMRC's assertions – particularly where the Tribunal itself accepted that written questions were no substitute for live engagement (see [28]) - meant that the FTT did not discharge its procedural duty to ensure fairness for an unrepresented party.

I am not satisfied that this ground is arguable. Once the FTT had exercised its discretion lawfully to proceed to determine the matter on the papers, it did not fail to adopt an inquisitorial approach.

The FTT performed a multifactorial evaluation of the reliability and credibility of the evidence given by the witnesses (including the Applicant) by reference to all the documentary evidence. It gave sufficient and rational reasons for rejecting the Applicant’s evidence or finding it to be unreliable or incredible. Furthermore, the Applicant has not identified any evidence or answers that he would have given had he received a telephone hearing, or if he had been asked further questions, that he was not able to provide in writing to the FTT before it made its determination. Therefore, any unfairness in deciding the appeal on the papers without a telephone hearing or exploring evidence through further inquisition could not be arguably material.

The FTT considered the Applicant’s explanation of reliance on professional advice received at [150(5)] but rejected it. It considered all the Applicant’s evidence and summarised it in the Decision.

In Volkswagen Financial Services (UK) Ltd v Commissioners for Her Majesty’s Revenue and Customs [2017] UKSC 26, at [7] Lord Carnwath observed that:

“One of the strengths of the new tribunal system is the flexibility of its procedures, which need to be and can be adapted to a wide range of types of case and of litigant. In some areas, particularly those involving litigants in person, a more inquisitorial role may be appropriate.”

The flexibility of the FTT’s procedures is enshrined in Rule 2 and in Rule 5(1), which provides that: “Subject to the provisions of the 2007 Act and any other enactment, the Tribunal may regulate its own procedure.”

While there is an inquisitorial nature to some appeals before the FTT (Tax Chamber), the extent of the duty varies greatly between unrepresented litigants who may be unsophisticated, unfamiliar with tax or live with disabilities as opposed to global corporate litigants who are represented by large and expert legal teams. The extent of the duty all depends on the facts of any case and fairness is key. How much of an inquisitorial role the FTT should adopt is therefore also a matter of discretion and thus the threshold for interference is high.

The FTT was clearly cognisant of the need to take a reasonably and proportionately inquisitorial approach and did so. I have referred above to the passages of the Decision where it sets out the method it adopted for posing questions of the Applicant in writing in advance of the determination and based upon the written evidence it had received. In addition, at [6(4)] of the FTT’s refusal for permission appeal it also stated: “In order to ensure that the Appellant was fairly treated I reminded HMRC when producing their skeleton argument of their duties when appearing against an unrepresented party that they should be thorough in their references to case law drawing my attention to all relevant case law. I am satisfied that HMRC’s skeleton argument did as directed.”

The FTT adopted reasonable and proportionate measures to demonstrate flexibility in its procedure. It is not arguable that it erred or that it should have adopted a more inquisitorial approach within the confines of a paper determination.

I refuse permission on Ground 1b.