Hurst
| Jurisdiction | UK Non-devolved |
| Judgment Date | 10 July 2019 |
| Date | 10 July 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 452 (TC)
Dr Christopher Staker
Procedure – Application for permission to appeal First-tier Tribunal (FTT) decision – Real prospect of success – Yes – Possible prejudice to appellant of HMRC raising issues for the first time in the Upper Tribunal not addressed by HMRC – Application refused – TCEA 2007 , s. 11 – Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 39.
The First-tier Tribunal (FTT) refused HMRC's application for permission to appeal against the decision of Hurst [2019] TC 07125. HMRC had not objected to the case law relied on by the taxpayer in the original decision, and although HMRC's appeal had a real prospect of success it would not have been fair for HMRC to be able to raise these arguments for the first time in the Upper Tribunal (UT).
In Hurst [2019] TC 07125 (the Decision), the FTT had allowed Mr Hurst's (the appellant's) appeal against late filing penalties. The FTT made the Decision based on the case law relied on by the appellant (and to which HMRC at the time did not object), namely Goldsmith [2018] TC 06284, Lennon [2018] TC 06453 and Groves [2018] TC 06541. The FTT took into account the contrary decision in Crawford [2018] TC 06594. The FTT concluded that in circumstances where an appellant relied on previous case law without presenting detailed submissions on the reasoning in those previous decisions, and where HMRC did not present any arguments as to why the previous case law of the tribunal was incorrect, then the tribunal was entitled to follow a previous line of tribunal case law.
HMRC applied to appeal the Decision on the grounds that the case law on which the appellant relied was incorrect as a matter of law. HMRC stated in particular that they had been granted permission to appeal in Goldsmith and Lennon and had applied for permission to appeal in Groves.
The FTT accepted that, for the purposes of deciding whether to accept the application for permission to appeal, the proposed HMRC appeal would have had a real prospect of success. The FTT noted that normally that would suffice for permission to be granted. However, it noted that it had discretion whether or not to grant permission, and countervailing considerations also needed to be considered.
The FTT found that:
- if HMRC considered that a case relied on by the appellant was incorrectly decided, then HMRC should be expected to say so, and to assist the tribunal in dealing with the issues thereby put in dispute; and
- If HMRC contended that a case was not correctly decided, then the appellant was entitled to be given notice of the HMRC arguments in that respect, and to have an opportunity to respond to those arguments.
The FTT noted that if permission to appeal were granted, these arguments would be heard and determined for the first time by the UT in an appeal against an FTT decision. Whereas normally a party would not be allowed to raise a new point for the first time on appeal, although there may be an exception where the new point was a pure point of law.
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...for these purposes that they would have a real prospect of success. [49] As the Tribunal (Judge Christopher Staker) wrote in Hurst [2019] TC 07257 (a permission to appeal decision in this Tribunal): [4] It is accepted for present purposes that the proposed HMRC appeal would have a real pros......