The Commissioners of HM Revenue and Customs v Root2 Tax Limited [2022] UKUT 00353 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | The Honourable Mr Justice Zacaroli and Judge Jonathan Cannan |
| Neutral Citation | [2022] UKUT 00353 (TCC) |
| Subject Matter | 20 December 2022 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 20 December 2022 |
Neutral Citation: [2022] UKUT 00353 (TCC) Case Number: UT-2022-000003
UPPER TRIBUNAL
(Tax and Chancery Chamber) Rolls Building
Fetter Lane
London
EC4A 1NL
Part 7 Finance Act 2004 – DOTAS provisions – notifiable arrangements – section 308 FA 2004
– duties of promoter – whether duty to notify arises on each implementation of notifiable
arrangements or on awareness of the first transaction implementing the notifiable
arrangements
Heard on: 2 November 2022
Judgment date: 20 December 2022
Before
The Honourable Mr Justice Zacaroli
Judge Jonathan Cannan
Between
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Appellants
and
ROOT2 TAX LIMITED Respondent
Representation:
For the Appellants: Aparna Nathan KC and Georgia Hicks, counsel instructed by the
General Counsel and Solicitor to His Majesty’s Revenue and Customs
For the Respondent: No appearance
1
DECISION
INTRODUCTION
1. This is an appeal by HM Revenue & Customs (“HMRC”) against a decision of the First-
tier Tribunal dated 22 September 2021 (“the FTT Decision”). The FTT Decision has reference
[2021] UKFTT 0346 (TC). The appeal concerns the Disclosure of Tax Avoidance Schemes
(“DOTAS”) provisions which are contained in Part 7 Finance Act 2004 (“FA 2004”). The
DOTAS provisions require those who promote and use certain tax avoidance arrangements to
provide information to HMRC about the arrangements.
2. In a previous decision, the FTT had held that certain arrangements known as the
“Alchemy Scheme” in respect of which the respondent (“Root2”) was a promoter, were
‘notifiable arrangements’ for the purposes of DOTAS – see Root2 Tax Ltd and Root3 Tax Ltd
v HM Revenue & Customs [2017] UKFTT 696 (TC) (“the DOTAS Decision”). As such, Root2
was required to provide information in relation to the arrangements to HMRC.
3. Section 98C Taxes Management Act 1970 (“TMA 1970”) makes provision for penalties
where a promoter fails to comply with the information requirements in FA 2004. HMRC
considered that Root2 had failed to provide information in relation to the arrangements as
required by FA 2004. In the circumstances, HMRC applied to the FTT for the FTT to determine
a penalty for non-compliance pursuant to section 100C TMA 1970 (“the Penalty Application”).
Root2 opposed the Penalty Application on various grounds, including that the application was
made out of time and should be dismissed.
4. The FTT directed that the following issue be determined as a preliminary issue:
Whether the application made by the Applicants, under section 100C of the Taxes Management
Act 1970 (‘TMA’), for a penalty to be imposed by the Tribunal on the Respondent, which
application was filed and served by the Applicants on 22 May 2019, was commenced in time,
with the parties agreeing that the relevant time limit is that prescribed by section 103(4) TMA,
namely ‘at any time within six years after the date on which the penalty was incurred or began to
be incurred.’
5. In determining the preliminary issue, the FTT had to identify the date on which the
penalty for failing to provide information required by the DOTAS provisions was incurred or
began to be incurred. The FTT helpfully provided an Appendix of relevant legislation to the
FTT Decision and for convenience we gratefully adopt it as an Appendix to this decision with
a few minor additions. The provisions are in the form at the time the penalty was said to be
incurred, and do not take into account amendments in Finance Act 2021.
6. The principal section with which this appeal is concerned is section 308 FA 2004 which
in so far as relevant provides as follows:
308(1) A person who is a promoter in relation to a notifiable proposal must, within the prescribed
period after the relevant date, provide the Board with prescribed information relating to the
notifiable proposal.
(2) In subsection (1) the relevant date means the earliest of the following
(za) the date on which the promoter first makes a firm approach to another
person in relation to a notifiable proposal,
To continue reading
Request your trial