UT (Tax & Chancery) UT/2025/000047 - [2025] UKUT 00362 (TCC)

there is no such application in the HMRC CM Application;

no such application was made or referred to in the HMRC FTT Skeleton, in which HMRC set out its “primary position” that disclosure directions should not be issued but did not set out a secondary or alternative position in the event that the FTT acceded to Ducas’ application to issue directions relating to disclosure and evidence; and

HMRC went further in the HMRC UT Skeleton and stated that “there was no application before the FTT for heightened disclosure against Ducas” (footnote 1 to [23]).

HMRC have not submitted in any of these written applications that they had made an application for extended disclosure against Ducas (ie a free-standing application) which the FTT had failed to consider. The opposite is the case – HMRC state in the HMRC UT Skeleton that they did not make an application for extended disclosure against Ducas. Mr Tolley confirmed at the rolled-up hearing that it was not HMRC’s case that the FTT had made an error of law by failing to give reasons or on the basis of any procedural impropriety.

Having said in the HMRC UT Skeleton at [20] that the UT Papers Refusal “appears to have misunderstood the material circumstances of the Directions Decision and the essential premises of the appeal”, the UT would have expected HMRC to ensure absolute clarity as to their position in subsequent representations to the UT (in this case, the HMRC UT Skeleton). Unfortunately, this was not the case.

The potential significance of the oral submissions made at the CMH only emerged during the rolled-up hearing. This meant that neither Ducas nor the UT had had cause to consider whether to request production of the FTT’s notes of the CMH. Instead, submissions were made on behalf of both HMRC and Ducas, recognising that Mr Tolley and Mr Bedenham (as well as Ms Inglis for HMRC and Mr Stone for Ducas) had both appeared at the CMH.

[5] and [9] are part of the summary of HMRC’s submissions, and include that both parties should disclose and that HMRC objected to the FTT issuing a direction that “only HMRC must disclose”. [11] is part of the summary of Ducas’ submissions and states that Ducas argued it should not be subject to the same disclosure standard as HMRC. These do support a submission that HMRC was seeking disclosure from Ducas, but do not assist in the issue of whether that was sought on a reciprocal basis (ie an order could only be made against HMRC if an equivalent order was made against Ducas) or if there was a free-standing application (or potentially something in between);

[14] starts by referring to the “applications made by the parties”, and Mr Tolley emphasised the use of plural “applications”. We do not find this to be of any assistance whatsoever; both parties had made case management applications (the Ducas CM Application and the HMRC CM Application) to which the FTT had referred at [3], and a plain and natural reading of [14] is that it is referring back to these applications; and

[21] addresses “the issue of whether the Appellant should also be required to disclose documents that adversely affect their own case or support HMRC’s case”. As with the summary of submissions, this (and [20] to [22] together) shows the FTT was considering an application of some form by HMRC, but not the basis on which it had been made.

Mr Tolley described the argument about reciprocity as being “mischaracterised” by Ducas, stating “It’s never been any part of HMRC’s case that there is automatic reciprocity, that whatever order is made in one direction must necessarily be made in the other, regardless of the issue” ([TS/p31/23 to p32/1]).

Mr Tolley did not accept that the HMRC UT Skeleton “majors” on reciprocity (TS/p34/14-15), referring to various paragraphs therein including [26] which states as an alternative submission that “in the specific circumstances of this case, on the premise that the FTT made any directions for disclosure, the FTT could rationally proceed only by ordering reciprocal heightened disclosure”.

Mr Tolley submitted that reciprocity “should be the order of the day” ([TS/p41/25]) but in the particular circumstances of this case, there were cogent reasons to make the same order. The specific circumstances were put to the FTT.

Being asked if it was HMRC’s position that HMRC made “a freestanding application” ([TS/p43/12]), Mr Tolley said “yes but on two premises” – that there were directions being made for disclosure and evidence at the time of the CMH rather than later, and that the FTT was departing from Rule 27 and ordering HMRC to make disclosure of adverse documents.

Mr Tolley submitted that [21] and [22] of the Written Reasons were “addressing squarely the application that was made to the tribunal on the day”. If that is the case, reading those paragraphs, we would conclude that the submissions had been made, and were premised, on the basis of reciprocity. As Judge Scott put it at the hearing, these paragraphs, “speak for themselves” ([TS/p45/19]) – they are addressing whether or not the FTT accepts that there is a principle of reciprocity. Mr Tolley submitted that these reasons are actually addressing two things – whether you should make a differential order against one party and not the other, and whether, in this case, it was appropriate to make differential orders.

Mr Tolley confirmed that it was HMRC’s submission that when they referred to the “circumstances of this case”, they meant that “reciprocity is particularly appropriate” ([TS/p48/11]), rather than that extended disclosure should be granted for a reason other than the principle of reciprocity.

Mr Tolley confirmed that it was at the “heart” of HMRC’s appeal, that “disclosure is or should be regarded as a matter of reciprocal obligation” (TS/p53/5-7]).