UT (Tax & Chancery) UT/2023/000103 - [2025] UKUT 00102 (TCC)

The Appellant, Morgan Lloyd Trustees Ltd (“MLT”) is a trustee of numerous pension schemes, many of which are Small Self Administered Schemes (”SSASs”). These are typically set up by family companies who employ the directors and sometimes a small number of other employees. SSASs are registered with HM Revenue & Customs (“HMRC”) in accordance with the provisions set out at Part 4, Finance Act 2004 (“FA 2004”) (Footnote: ¹).

Over 580 employers set up SSASs of which MLT was a trustee, and they subsequently transferred various items of IP, such as domain names, websites and trademarks, to their SSAS in exchange for cash. HMRC estimate that between December 2004 and January 2013 some £52m was paid out to employers in over 840 transactions as a result of these IP-related deals.

HMRC decided that many of the employers had received “unauthorised employer payments” which had given rise to unauthorised payment charges and surcharges under s 208 and s 209, and issued the related assessments. HMRC also assessed MLT to scheme sanction charges under s 239. MLT applied to HMRC for the scheme sanction charges to be discharged under s 268; HMRC refused some of the applications and decided others had been made outside the statutory time limit.

Around 580 employers appealed to the First-tier Tribunal (“FTT”) against the unauthorised payment charges; MLT appealed to the FTT against (a) the scheme sanction charges, and (b)HMRC’s refusal to discharge those charges; MLT also appealed on the basis that HMRC had misunderstood and/or misapplied the time limit provisions relating to applications for discharge.

Seven employers (“the Employers”) were selected as informal lead appeals, and the FTT hearing took place over four weeks at the end of 2022 before Judge Rachel Short and Mr Julian Stafford. The FTT rejected all the appeals in a decision released on 31 March 2023 under reference [2023] UKFTT 355 (TC) (“the FTT Decision”). In this judgment, references to paragraphs of the FTT Decision are shown by square brackets, as [XX].

MLT applied for permission to appeal against the FTT Decision; this was refused by the FTT but granted on the papers by the Upper Tribunal (“UT”). None of the Employers applied for permission to appeal.

The hearing of MLT’s appeal at the UT took place over two days, with Mr Simpson representing MLT, as he had done at the FTT, while Ms Poots, who had represented HMRC at the FTT, was assisted by Mr Jamie Muir Wood, Ms Sarah Black and Mr Emile Simpson (Footnote: ²). We are grateful for their clear and helpful submissions and also for their command both of the relevant principles and of the extensive documentation: the document bundles exceeded 5,000 pages. We also extend our thanks to their legal teams.