X Ltd & others –v- Her Majesty’s Revenue & Customs
Thursday 10th June 2021
By Appellants Notice filed on 31 March 2020 the 3 Taxpayer companies and 17 others (the Individuals) appeal, with permission to appeal in part from the Upper Tribunal (Tax and Chancery Chamber) , UTJJ Jonathan Richards & Thomas Scott sitting, their decision dated 20 January 2020 in respect of the refusal of the “Adversarial Hearing application” made by the Appellants below.
In 2014 HMRC opened enquiries into the Taxpayers corporation tax self assessment returns. The parties are in dispute over the reliability of the Taxpayers’ records. In 2017 the Taxpayers applied to the FTT under paragraph 33 of Schedule 18 of the Finance Act 2008 for a direction requiring HMRC to close those enquiries by issuing Closure Notices. In parallel HMRC applied to the FTT under Schedule 36 of the 2008 Act for approval of information notices requiring 17 Individuals (also Appellants below) to provide information considered by HMRC to be relevant to the Taxpayers’ tax position.
The FTT decided 1. to stay the Closure Notices application pending determination of the Schedule 36 application 2. it had no power to grant the Adversarial Hearing application (in which the Appellants below requested full rights to argue at an oral inter partes hearing , that the FTT should not approve the Schedule 36 application).
The UT dismissed the appeal in respect of the first decision. The UT concluded the FTT had no power to consider allowing or requiring participation by the Taxpayer or third party in the Schedule 36 application, but found the FTT’s decision it lacked jurisdiction to direct a hearing in public was wrong, although it will almost never do so. The UT remade the decision and came to the same conclusion that the Schedule 36 hearing should be heard in private.