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Q11: Appealing case management decisions
Establish whether the FTT actually ruled on the point
"[37] We acknowledge there is some room for debate around whether the FTT was making a specific ruling on the point, when this extract is set in the wider context of the decision (where the main dispute was around whether a “someone knew” type case was possible, and given the original scope of the hearing was to deal with Ammanford’s information request application). However, noting that HMRC did not take any point on the scope of the FTT decision under appeal, we consider the better view is that the FTT did make a ruling to the effect that HMRC did not have to identify individuals who had knowledge of connection to fraud in order to be able to put to a specific witness appearing on behalf of Ammanford that that witness knew of such connection." (Ammanford Recycling Limited v. HMRC [2023] UKUT 302 (TCC), Judges Raghavan and Greenbank)
- Which also requires it to be established what application was actually made
"[61] The significantly more difficult issue for us to determine is the basis, or reasons relied upon, for the application made by HMRC to the FTT. The making of the application orally means that we have limited evidence available to assist with our assessment of this issue. During the course of Mr Tolley's submissions, we challenged Mr Tolley as to the grounds being put forward by HMRC, with a particular emphasis on the extent to which HMRC relied solely on there being a principle of reciprocity such that, having ordered extended disclosure against HMRC, the FTT's error of law was that it must rationally then have proceeded to order extended disclosure against Ducas. We considered that Mr Tolley's oral submissions at the rolled-up hearing on this important issue were not entirely consistent or clear....
[...]
[64] Having considered carefully all of the written and oral submissions which have been made by HMRC, the UT accepts that HMRC did make an oral application to the FTT at the CMH, once the FTT had decided to make disclosure directions and to make an extended disclosure direction against HMRC, for an order for extended disclosure against Ducas. However, consistently with the position initially put in writing to Ducas in January/February 2025, that application was expressed to the FTT to be on the basis and on the premise that the FTT was required to make reciprocal disclosure directions where it decided to order extended disclosure against one party.
[65] The significance of all this is that submissions made by HMRC in this appeal as to the FTT having made an error of law in ordering extended disclosure only against HMRC must be assessed by reference to the way in which the application was made to the FTT by HMRC at the CMH." (HMRC v. Ducas Ltd [2025] UKUT 362 (TC), Judges Thomas Scott and Zaman)
- Resist the temptation to consider applications the appellant could have made but did not make
"[99] However, we must resist the temptation to determine this appeal on the basis of an application which HMRC could have made to the FTT but did not, or on the basis of reasoning which HMRC could have advanced to the FTT but did not, or on the basis of arguments which could have been raised in this appeal but were not. This appeal is not a "do-over", and it is for the FTT and not the UT to case manage Ducas' appeal." (HMRC v. Ducas Ltd [2025] UKUT 362 (TC), Judges Thomas Scott and Zaman)
Establish what the FTT directed
- Consider in light of the applications before the FTT
"[71] In coming to this conclusion we take into account the nature of the applications made to the FTT. Neither party had applied to the FTT for witness summonses to call any person as a witness on their behalf. Indeed, this is unsurprising when HMRC was not applying for additional Locums to be witnesses on their own behalf but for the Appellant to call them. The nature of HMRC's application dated 24 April 2024 is recorded above at paragraph 16." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
- Consider with statements at the hearing
"[78] Nonetheless, we do not accept that the FTT was directing that the additional witnesses be summonsed as witnesses on behalf of the Appellant. Rather we are satisfied that the FTT was directing that the additional witnesses would be summonsed of its own initiative as its own witnesses.
[79] As above, the Appellant had not applied to summons the additional witnesses itself and the Appellant objected to the process and hence to calling any further witnesses. Nor had HMRC applied for witness summonses to call them as their own witnesses. The FTT did not require the Appellant to advise whether it would be applying for witness summonses but whether summonses 'will be required'. Furthermore, the words stating that the FTT would issue summonses 'if necessary' rather than 'on application' suggest the Direction was proposing that the FTT would summons the additional witnesses of its own initiative if the Appellant would not volunteer them.
[80] We are fortified in this view by the judge's references during the hearing on 14 May 2024, as recorded in the transcript excerpt set out at paragraph 17 above, to "the panel requesting" the evidence. The written Direction recognises that the Tribunal could only summons witnesses to give oral evidence, rather than to produce a witness statement, but does not suggest any change of view on whether the witnesses would be the Tribunal's or a party's." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
Whether decision is simply a matter of case management
- Consider with other directions made
"Our interpretation is also consistent with the Direction at [19] that a preliminary hearing would be necessary for evidence (in-chief) to be elicited if witness statements were not produced. This would be less likely to be the procedure if a witness were to be summonsed on behalf of a party because the elicitation of all of their evidence, both evidence in chief and cross examination, might be expected to take place within the substantive hearing itself. Thereafter it was presumably anticipated that both parties would be able to cross examine the witnesses at the substantive hearing of the appeal." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
- Decisions that will pre-empt other proceedings
“For my part I accept that this is a case management decision. It is, however, not simply a matter of management if one set of proceedings will effectively pre-empt or significantly raise an obstacle to the other.” (Davies v. HMRC [2008] EWCA Civ 933, §15 – in relation to a decision to adjourn the hearing of the permission stage of judicial review proceedings until the statutory appeal was concluded)
Similar approach for exercise of statutory discretions
"[18] In these proceedings, the Border Force is challenging the FTT’s exercise of a statutory discretion. Although that is not strictly a “case management” discretion (see [18] and [19] of Martland), we should nevertheless be slow to interfere with the proper exercise of the FTT’s discretion. Like the Upper Tribunal in Martland, we will apply by analogy the well-known statement of principle set out by Lawrence Collins LJ in Walbrook Trustee (Jersey) Limited v Fattal [2008] EWCA Civ 427..." (Director of Border Reveneu v. Turek [2020] UKUT 167 (TCC), Judge Richards and Judge Greenbank)
Case management decisions within case management decisions
"[69] We agree with HMRC that the decision to admit the letter of RSM at the hearing on 12 October 2020 can be characterised as a ‘meta case management decision’. It was a case management decision within the hearing of an application for a disclosure direction, itself a case management application. Placing it in this perspective emphasises the point that the Upper Tribunal should be very slow to interfere with it." (Ellis v. HMRC [2022] UKUT 254 (TCC), Judge Greenbank and Judge Rupert Jones)
Error of law may not be material to main case management decision
"[80] We do not regard the failure to give reasons for the decision to admit the RSM letter, or to identify the correct test for that decision both at the hearing and in its written decision, as demonstrating that the decision to grant the application for disclosure was plainly wrong or unjustifiable." (Ellis v. HMRC [2022] UKUT 254 (TCC), Judge Greenbank and Judge Rupert Jones)
Whether to issue decision in principle is case management decision
"[52] As is well-established (see for instance Wrottesley [9] to [13] and the authorities referred to there) the Upper Tribunal will be slow to interfere with the FTT's exercise of a case management discretion unless it is so plainly wrong that it is outside the generous ambit of discretion entrusted to the judge. Mr Firth argues the decision was plainly wrong because it failed to consider the relevant factor of the inadequacy of HMRC's pleadings and the circumstances in which the quantification issue arose." (Kingston Maurward College v. HMRC [2023] UKUT 69 (TCC), Judge Raghavan and Judge Brannan)
Grounds of challenge: summary
"[21] This was a full and very carefully considered judgment. However, it would nonetheless be appropriate for an appellate court to interfere with it, if it could be shown that irrelevant material was taken into account, relevant material was ignored (unless the appellate court was quite satisfied that the error made no difference to the decision), there had been a failure to apply the right principles, or if the decision was one which no reasonable tribunal could have reached. Ms Simor has argued that there were a number of errors in the judgment, and also that the ultimate decision was outside the bounds of what a reasonable tribunal could have decided." (HMRC v. BPP Holdings Ltd [2017] UKSC 55, Lord Neuberger)
"Case management decisions are discretionary decisions. They often involve an attempt to find the least worst solution where parties have diametrically opposed interests. The discretion involved is entrusted to the first instance judge. An appellate court does not exercise the discretion for itself. It can interfere with the exercise of the discretion by a first instance judge where he has misdirected himself in law, has failed to take relevant factors into account, has taken into account irrelevant factors or has come to a decision that is plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree. So the question is not whether we would have made the same decisions as the judge. The question is whether the judge's decision was wrong in the sense that I have explained." (Kop Football (Cayman) Limited v. Hicks [2012] EWCA Civ 1743, Lewison LJ)
"[10] The approach to be taken where an appeal is made against a case management decision has been addressed extensively, with the appellate courts emphasising the need for "extreme caution" (Goldman Sachs International v HMRC [2009] UKUT 290 (TCC) ([23] to [24]).
[11] In HMRC v Dettori [2024] UKUT 12 (TCC), the UT said:
"An appeal against a case management decision
[16] An appeal to this Tribunal lies only on a point of law...In addition, the direction under appeal resulted from an exercise by the FTT of its case management powers. In the decision of the Supreme Court in BPP Holdings v HMRC [2017] UKSC 55 ("BPP") Lord Neuberger, delivering the judgment of the Court, said this, at [33]:
In the words of Lawrence Collins LJ in Walbrook Trustee (Jersey) Ltd v Fattal [2008] EWCA Civ 427, para 33:
"[A]n appellate court should not interfere with case management decisions by a judge who has not applied the correct principles and who has taken into account matters which should be taken into account and left out of account matters which are irrelevant, unless the court is satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge."
In other words, before they can interfere, appellate judges must not merely disagree with the decision: they must consider that it is unjustifiable.
[17] Earlier in his judgment, at [21], Lord Neuberger said:
However, it would nonetheless be appropriate for an appellate court to interfere with [the FTT's decision], if it could be shown that irrelevant material was taken into account, relevant material was ignored (unless the appellate court was quite satisfied that the error made no difference to the decision), there had been a failure to apply the right principles, or if the decision was one which no reasonable tribunal could have reached."
[12] We have applied these principles in reaching our decision." (HMRC v. Ducas Ltd [2025] UKUT 362 (TC), Judges Thomas Scott and Zaman)
"[20] As the Upper Tribunal recently set out in NTK Leisure Limited v HMRC [2022] UKUT 289 (TCC) (which also concerned an appeal in relation to a reinstatement application following a strike-out), a decision on reinstatement involves the exercise of discretion by the FTT in relation to a matter of case management.
[21] The Upper Tribunal will accordingly be slow to interfere with the proper exercise by the FTT of its discretion in case management decisions unless the judge has failed to apply the correct principles, failed to take into account matters which should be taken into account, or has left out of account matters which are relevant, or the Upper Tribunal is satisfied the decision is plainly wrong. This reflects the observations of Lawrence Collins LJ in Walbrook Trustee (Jersey) Ltd v Fattal [2008] EWCA Civ 427 in relation to case management decisions under the Civil Procedure Rules but which were quoted with approval by the Supreme Court in BPP Holdings Ltd & Ors v HMRC [2017] UKSC 55 (at [33]), which was a case involving case management discretion under the FTT Rules, in that case a debarring order (the equivalent sanction to a strike-out in relation to respondents to appeals).
[22] There is no issue here regarding the grounds of appeal falling with the above restrictions. As [the taxpayer] explained, Grounds 1 and 3 allege errors of principle, and Ground 2 is a challenge based on the FTT failing to take account of a relevant matter." (Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)
- Benevolent reading of FTT decision
"[43] More generally, the UT should adopt what has been termed a "benevolent reading" approach to the interpretation of FTT decisions: DPP Law Ltd v Greenberg [2021] EWCA Civ 672, [2021] IRLR 1016 ("Greenberg"), [57]-[58]. In summary: such decisions must be read fairly and as a whole, without focusing merely on individual phrases or passages in isolation, and without being hypercritical; what is out of sight in the language of the decision is not to be presumed to be out of mind; and where a tribunal has correctly stated legal principles, one should be slow to conclude that they have not been applied. Although the Court of Appeal's decision in Greenberg related to appeals from employment tribunals, the same approach has been held to apply to appeals from the FTT: Exchequer Solutions Ltd v HMRC [2024] UKUT 25 (TCC), [2024] STC 271, [63]." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
Generous ambit of discretion entrusted to judge/slow to interfere
"[16] The first, and ultimately insuperable obstacle faced by Mr Watts is that his appeal is against the exercise of a case management discretion, namely the discretion either to grant or refuse an extension of time. It is now well established that this court is in the highest degree reluctant to interfere in first instance decisions of that character. The court will only do so where the judge has misdirected himself in law, has failed to take relevant factors into account, has taken into account irrelevant factors or has come to a decision which is plainly wrong in the sense of being outside the generous ambit of discretion where reasonable decision-makers may disagree: see for a recent re-statement of that approach: Broughton v Kop Football (Cayman) Limited and others [2012] EWCA Civ 1743 at [51], per Lewison LJ. Strict rules against appellate intervention in case management decisions are necessary, otherwise the progress of actions towards trial would be the subject of repeated interruptions caused by appeals." (Watts v. HMRC [2021] EWCA Civ 1124)
“These were case management decisions. I do not need to cite authority for the obvious proposition that an appellate court should not interfere with case management decisions by a judge who has applied the correct principles and who has taken into account matters which should be taken into account and left out of account matters which are irrelevant, unless the court is satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge.” (Walbrook Trustee (Jersey) Ltd v. Fattal [2008] EWCA Civ 427, §33, Lawrence Collins LJ).
"[41] In Goldman Sachs International v HMRC [2009] UKUT 290 (TCC), [2010] STC 763, the Upper Tribunal stated at [23] that it "should exercise extreme caution in entertaining appeals on case management issues" and observed at [24] that the general principle limiting appeals against case management decisions "applies with at least as great, if not greater, force in the tribunals' jurisdiction as it does in the court system"." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
“It is well-established that this Tribunal will be slow to interfere with the proper exercise by the FTT of its discretion in case management decisions…In short, if these principles are to be applied, we will need to be satisfied that the FTT were plainly wrong if we are to set aside their decision. It is not sufficient that we may have exercised the discretion ourselves differently.” (Westminster Trading Ltd v. HMRC [2017] UKUT 23 (TCC), §§49…50).
“I am clear that the principle [in Walbrook Trustee, see above] applies with at least as great, if not greater, force in the tribunals’ jurisdiction as it does in the court system.” (Goldman Sachs International v. HMRC [2009] UKUT 90 (TCC), §23, Norris J)
- Not just wrong but unjustifiable
"[42] The underlying principles were collated and summarised in HMRC v BPP Holdings Ltd [2017] UKSC 55, [2017] 1 WLR 2945 ("BPP Holdings"), at [33]:
"In the words of Lawrence Collins LJ in Fattal v Walbrook Trustee (Jersey) Ltd [2008] EWCA Civ 427, [2008] All ER (D) 109 (May), at [33]:
"[A]n appellate court should not interfere with case management decisions by a judge who has applied the correct principles and who has taken into account matters which should be taken into account and left out of account matters which are irrelevant, unless the court is satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge."
In other words, before they can interfere, appellate judges must not merely disagree with the decision: they must consider that it is unjustifiable." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
Appeals against decisions relating to costs (same approach)
"[46] The parties were rightly agreed that this Tribunal should be slow to interfere with the exercise of a case-management discretion, particularly where that discretion related to the award of costs. In Atlasjet Havacilik Anonim Sirketi v Ozlem Kupeli and others [2018] EWCA Civ 1264, Hickinbottom LJ set out the applicable principle as follows:
5. In relation to that rule, several points are worthy of note.
i) In considering orders for costs, the court is of course bound to pursue the overriding objective as set out in CPR rule 1.1, i.e. it must make an order that deals justly with the issue of costs as between the parties. Therefore, when considering whether to make a costs order – and, if so, the order it makes – the court has to make an evaluative judgment as to where justice lies, on the facts and circumstances as it has found them to be.
ii) Before an appeal court will interfere with the exercise of that discretion, as with any appeal, it must be satisfied that the decision of the lower court was wrong or unjust because of a serious irregularity in the proceedings below (CPR rule 52.21(3)). No one suggests that there was a serious irregularity in this case.
iii) Before an appeal court concludes that the costs decision below was "wrong", it must be persuaded that the judge erred in principle, or left out of account a material factor that he should have taken into account, or took into account an immaterial factor, or that the exercise of his discretion was "wholly wrong" (see, e.g., Adamson v Halifax Plc [2002] EWCA Civ 1134; [2003] 1 WLR 60 at [16] per Sir Murray Stuart-Smith, adopting (post-CPR) the conventional (pre-CPR) approach he described in Roache v News Group Newspapers Limited [1998] EMLR 161 at page 172).
iv) An appeal court will only rarely find that the exercise of discretion below is "wholly wrong", because not only is that discretion particularly wide but the judge below is usually uniquely well-placed to make the required assessment, having heard the relevant evidence." (Worldpay UK Limited v. HMRC [2020] UKUT 290 (TCC), Judge Richards and Judge Cannan - relating to a decision to defer determining the costs consequences of HMRC being permitted to amend their statement of case at a very late stage)
Not required to consider alternative direction not suggested by the parties
"[56] The suggestion now canvassed in the Kop defendants' skeleton argument that the trial should not begin until 2014 is later than any of the dates canvassed before the judge. Given the way that the rival cases were presented to the judge, I consider that he was realistic in deciding that the choice before him was between April and October 2013. In my judgment, it was a proper exercise of his discretion in the circumstances in which he found himself to choose April. There was no evidence before him that an April date would cause hardship to the Kop defendants. Mr Malek appears to me to have accepted that an April start date was possible. That was certainly how Mr Harris and the judge interpreted what he had said and they were not contradicted. The judge balanced the factors that were put to him as relevant to the exercise of his discretion. It came to what he plainly regarded as the least worst solution. I would refuse permission to appeal on this ground." (Kop Football (Cayman) Limited v. Hicks [2012] EWCA Civ 1743, Lewison LJ)
"[80]...We were initially concerned that in not considering whether some documents should be disclosed to Mr Bell, even if HMRC were not entitled to rely on them, the FTT might have made an error of law of the type referred to in Ingenious, by failing to take into account a relevant consideration. However, on reflection, we consider that the FTT made no such error.
[81] We reach that conclusion for the simple reason that neither HMRC nor Mr Bell asked the FTT to consider this alternative approach..." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
“It follows that the reasoning of the FtT, when refusing permission to amend, was wrong in law and cannot stand. Even if the first reason referred to above is not to be regarded as a reason for refusing permission to amend but only a misunderstanding of whether permission was needed, it remains the case that the FtT took into account three matters, two of which it should not have taken into account.” (HMRC v. AG Villodre SL [2016] UKUT 166 (TCC), §59).
- Focus is on the decision the Tribunal actually made, not alternative decisions it could have made
"[57] Moreover, we consider that the appropriate focus should, in the first instance, be on the decision that the FTT did make (to defer the determination of costs) and not on an alternative decision (to make an immediate award of costs) that the FTT could have made. Of course, we recognise that Worldpay’s complaint is that the FTT should immediately have given it its costs. However, it seems to us that this is to conflate the consideration of whether there was an error of law in the FTT’s decision with consideration of the way that decision should be remade if there was such an error. In our judgment, in order to achieve the outcome it seeks, Worldpay must first satisfy us that the FTT was wrong to make the decision it did, to defer consideration of costs. If, and only if, it succeeds with that argument, it must establish that the Decision must be remade so as to provide for an immediate award of costs to Worldpay." (Worldpay UK Limited v. HMRC [2020] UKUT 290 (TCC), Judge Richards and Judge Cannan - relating to a decision to defer determining the costs consequences of HMRC being permitted to amend their statement of case at a very late stage)
Consequential case management decision cannot be challenged on the basis that prior, unappealed case management decision was wrong
"[56] No particular difficulty would arise if Worldpay was challenging both the FTT’s decision to permit the amendment and its decision on costs. In that case, Worldpay could argue that the FTT had been wrong, as a matter of law or principle, to permit the amendment. If that argument succeeded before the Upper Tribunal, the Upper Tribunal could have remade the decision to allow the amendment and having done so could, in exercise of its powers under s12(4) of the Tribunals, Courts and Enforcement Act 2007, have made a direction to the effect that HMRC should pay Worldpay its costs thrown away by the postponement of the hearing. However, in circumstances where Worldpay is not appealing against the decision to allow the amendment, Worldpay’s collateral attack on that decision introduces a degree of unreality into proceedings. Worldpay is effectively saying that the FTT should, applying correct principles at the costs stage of its decision, have concluded that HMRC had no good reason to amend their pleadings so late even though the FTT had already decided that there were good reasons when permitting the amendment." (Worldpay UK Limited v. HMRC [2020] UKUT 290 (TCC), Judge Richards and Judge Cannan - relating to a decision to defer determining the costs consequences of HMRC being permitted to amend their statement of case at a very late stage)
Error of approach/incorrect principles
"[123] We are conscious that we should proceed with caution before interfering with the FTT's exercise of discretion in making a case management decision. We can only do so if the high threshold set out at [33] of BPP Holdings is met. This includes application of incorrect principles in the exercise of the FTT's discretion." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
- Error of approach impugns decision unless it could have made no difference to the outcome
“The whole debate for the purposes of Ground 2 was as to the way the F-tT went about its fact finding in relation to due diligence. In the last sentence of [369], the F-tT states that the precise extent of due diligence was not determinative. Thus, even if it had at some earlier point misdirected itself in relation to due diligence, it would not have affected the result and it would not be appropriate to remit the matter on the basis of such a misdirection.” (HMRC v. CCA Distribution Ltd (in administration) [2015] UKUT 513, §73, Morgan J and Judge Herrington).
“However, it is not enough simply to attack the approach. Mr Maugham must in addition demonstrate that, had the F-tT approached this part of the evidence correctly, their doing so would, or at least might, have affected the outcome.” (Degorce v. HMRC [2015] UKUT 447 (TCC), §95, Hildyard J and Judge Bishopp).
“Accordingly, unless it can be demonstrated from the decision as a whole that the wrong approach could have made no difference to the outcome, the Judge’s decision to allocate the case as a Standard case should be set aside and the matter should be determined afresh. For our part, we are unable to conclude that the adoption of the wrong approach could have had no impact on his actual decision. Accordingly, we would allow the appeal on this ground alone.” (Capital Air Services Ltd v. HMRC [2010] UKUT 373, §25).
- Failing to apply correct, structured test for late appeal
"[62] Martland Stage 2 requires the FTT to establish the reason or reasons why the default occurred. This requires more than just a narrative of the factual background, although that will be important. What is required is a list of the factors that the FTT has found to be in play, possibly with a brief description of their significance. In this case, it is possible to appreciate that the FTT was looking to two factors in particular, (i) Mr Ruprai's ill-health, and (ii) the incompetence of his professional advisor. But we are unsure as to whether this is the complete list. For instance, Mr Ruprai advanced arguments about the intensity of HMRC's investigation and the amount of work this entailed for both Mr Ruprai and Mr Patel. There is no indication that this has been considered by the FTT as a reason for the delay. The process of establishing the reasons for the default is the essence of Martland Stage 2. This process is unavoidable if the balancing in Martland Stage 3 is to be properly undertaken. The failure properly to consider Martland Stage 2 is thus a strong indicator that the FTT did not properly consider Martland Stage 3.
[63] The FTT's approach meant that it disabled itself from conducting a meaningful Martland Stage 3 assessment. The balancing exercise requires consideration of all the circumstances with the relevant factors being clearly identified and at least some assessment of their weight. No such analysis appears to have been undertaken here, nor could it have been given the failure to engage with Martland Stage 2.
[64] It does not appear from the Decision that the FTT properly conducted the balancing exercise at Stage 3 of Martland. We therefore allow the appeal on Ground 1." (Medpro Healthcare Limited v. HMRC [2025] UKUT 255 (TCC), Marcus Smith J and Judge Cannan)
- Direction to summons witness on FTT's initiative inconsistent with principle of party autonomy
"[133] We consider that the Directions at [18]-[19] did offend the principle of party autonomy as explained in QX (which applies equally to adversarial proceedings before the FTT) as to which witnesses they chose to call to give evidence (the witnesses either cooperating voluntarily or being compelled through the party applying for a witness summons). Although the FTT was not selecting the identity of the witnesses to be compelled, whose identity was to be provided by the parties, it was not merely deciding the scope of the evidence it required to determine the appeals but encroaching upon the tactical and strategic choices that well represented parties were entitled to make as to which evidence they wished to present at the hearing of the appeal.
[134] This reasoning applies even though we have found it to be a Direction for a witness summons of the FTT's own initiative, in the same way it would have offended the principle of party autonomy if the FTT had made a Direction requiring the Appellant to call witnesses on its behalf whom it did not wish to call.
[135] The Direction required Rowlands to name five Locums who would in consequence become witnesses in the proceedings. The fact that Rowlands was given the option to call them rather than being required to call them does not alter the fact that this amounted to forcing Rowlands to cause evidence to be adduced from individuals from whom it did not wish evidence to be adduced." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
- Incorrectly adopting a more inquisitorial approach in case of well-represented litigants
"[143] The FTT, in making the additional witnesses Direction, was therefore going beyond being the neutral arbiter in adversarial proceedings, even though it was doing so on the basis of attempting to define the scope of the evidence it considered it needed to fairly determine the appeal. On the facts of this case, the FTT could not properly rely on preferring to adopt a more inquisitorial or investigative role." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
- Failing to test decision re relevant evidence/witness by reference to parties pleaded cases
"[153] Under the FTT's Practice Statement, therefore, the need for the summons would be considered by reference to HMRC's pleaded case. In the present case, there was no pleaded case from HMRC on RMC3, the relevant issue, so such an application by HMRC is not presently justified. The Direction implies that witness summonses would if necessary be issued in respect of witnesses named by the parties, without regard to the relevance of their evidence to any pleaded assertion. We address HMRC's absence of pleaded assertion on RMC3 in further detail below." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
- Failing to apply the principle that pleadings come before evidence
"[160] First, it wrongly reverses the order of events provided by the FTT Rules: following the filing of the Appellant's notice and grounds of appeal, HMRC's statement of case is to set out its position in relation to the case (see Rule 25(2)) and thereafter, in a standard or complex case, the parties are to file their lists of documents setting out what they intend to rely on or produce at the hearing; the Appellant is entitled to know the case that it must meet, set out in HMRC's statement of case, before deciding what witnesses to produce or call.
[161] The FTT's Direction, rather than enabling the parties to adduce evidence to advance their pleaded case or rebut the other party's pleaded case, has in effect turned the giving of evidence into a means of informing HMRC about the underlying facts before they complete their pleadings and finalise their case.
[162] HMRC's pleaded case would necessarily affect the decisions that the Appellant would take as to what witness evidence to call in support of its appeal. As in most litigation, the disclosure and the evidence lodged by parties respond to the issues raised in the pleadings. There are express rules of procedure in the FTT Rules which are essential for the fair and just disposal of the proceedings. Those rules have, however, been inverted by the FTT in this case." (L Rowland & Co (Retail) Limited v. HMRC [2026] UKUT 130 (TCC), Judges Jones and Paines KC)
Failing to take account of relevant considerations
- FTT not taking into account partial compliance
"[39] The ground of appeal is that the FTT did not take into account the provision of an unsigned statement on 8 October 2019 in the Stage 1 test. Taking the provision of that statement into account would, we note, be consistent with the need to analyse the underlying breach, namely the failure to comply with the tribunal’s directions, standard in this type of case, to serve witness statements on the other party before the hearing is listed. We therefore agree with Mr Windle that the provision of the unsigned witness statement would, in principle, be of potential relevance. The FTT did not however take the unsigned witness statement into account at Stage 1. It wrongly focused on the breach of the unless order (to the exclusion of the underlying breach). That, in our judgment, represented an error of law." (Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)
- Particular importance of litigation being conducted efficiently and at proportionate cost
"[28] Therefore, the FTT had to take into account the “particular importance” of litigation being conducted efficiently and at proportionate cost and of rules and time limits being respected and give particular weight to those factors. However, in its self-direction at [47], the FTT said:
"These [factors] do not have special weight or importance and the obligation of the Tribunal remains simply to take into account, in the context of the overriding objective of dealing with cases fairly and justly, all relevant circumstances, and to disregard factors that are irrelevant."
[29] That, on its face, suggests that the FTT was misdirecting itself as to the parameters applicable to its exercise of discretion. Mr Gibbon argued that, even if the self-direction at [47] was not expressed perfectly, the FTT applied the correct approach when it said, at [57], that its evaluation has to proceed from the “starting point” that it is important that litigation be conducted efficiently and at proportionate cost, and that time limits be respected. We do not accept that submission. The wording in paragraph [57] might have been regarded as unexceptionable if the FTT had not included its mistaken selfdirection at [47]. However, when paragraph [57] and [47] are read together, we have reached the clear conclusion that describing the two factors merely as “starting points” did not give them the particular weight that Martland required." (HMRC v. BMW Shipping Agents Limited [2021] UKUT 91 (TCC), Judge Richards and Judge Cannan)
- No obligation to search for additional relevant points outside of submissions
"[48] In so far as Balls suggests that there is an obligation on the judge to have regard to the tribunal file, to identify any relevant material and to seek submissions from the parties if there is any matter to which the parties have not referred, then we do not consider that should apply to the FTT (Tax Chamber).
[49] The starting point will be that in making decisions, in circumstances where the parties have had the opportunity to make their representations, the judge will expect the parties to identify the issues on which a decision is required and to refer to the documents from the file which are considered to be relevant to those issues (because either they have come from the party, or if not, they have been copied to them by the tribunal or the other party). In this case, we can see detailed directions were issued to flush out the submissions and the documents each party intended to rely on.
[50] To impose an obligation, in these circumstances, to consider the file to see if there is anything relevant in it which the parties have not referred to puts an unwarranted burden on judicial resource. Parties may reasonably be assumed to know what they have filed and because they are routinely expected to copy the other side on any communications with the tribunal to know what the other party has filed. Practical difficulties arise in that judges will not necessarily have ready access to the full file because the file may be located in a different location to where the judges sit. Even if accessible, the files can in some cases contain volumes of correspondence and applications stretching over a number of years.
[51] [The taxpayer], perhaps in recognition of these concerns, did not go to the extreme of suggesting that the FTT should be expected to peruse the file to identify any relevant material and then put all documents not referred to by the parties back to the parties for submissions. He put the obligation more narrowly: the tribunal should seek submissions where there was a document on the file that was considered potentially relevant such that it warranted mention in the FTT’s decision.
[52] In our view the relevant principles, grounded as they are in the fairness of giving parties the opportunity to deal with information the tribunal relies on, but which the parties have not had the opportunity to comment, require no elaboration. The application of the principles will depend on the particular facts. If the judge sees material on the tribunal file, which the judge considers relevant, in the sense that the FTT proposes to take account of it when making its decision, and it is clear one or more of the parties has not seen it (for instance because the material has not emanated from the parties, or if it did, it is clear that it was not copied to the other) then of course the FTT ought to invite submissions from the parties on it. As Balls indicates that is part of the normal duty to act judicially."(Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)
- Unfair to criticise on the basis of matters never raised by parties who had plenty of time to prepare
"[52] In addition, in Allen v Bloomsbury Publishing Limited [2011] EWCA Civ 943, Lloyd LJ said that it was unfair to criticise the exercise of a discretion by a judge on the basis that he had failed to consider matters which were never raised before him where each party had had plenty of time in which to put the matters which they considered relevant before the judge. As Lloyd LJ said:
"In our adversarial system of litigation, in a case where each party was professionally represented, with plenty of opportunity to formulate and put to the court all points considered to be relevant on a particular point, it seems to me questionable for a judge to be criticised for having failed to take into account a factor which, if relevant, was known or available to all parties and which no party invited him to consider as part of the process of exercising his discretion."
Rix and Sullivan LJJ agreed." (Kop Football (Cayman) Limited v. Hicks [2012] EWCA Civ 1743, Lewison LJ)
Taking into account irrelevant considerations
“It follows that the reasoning of the FtT, when refusing permission to amend, was wrong in law and cannot stand. Even if the first reason referred to above is not to be regarded as a reason for refusing permission to amend but only a misunderstanding of whether permission was needed, it remains the case that the FtT took into account three matters, two of which it should not have taken into account.” (HMRC v. AG Villodre SL [2016] UKUT 166 (TCC), §59).
- Failing to take account of sending of unsigned witness statement to FTT not material (not sent to HMRC and unless order required signed statement)
"For the reasons below the error, in our view, was clearly not material, in the sense that it might have made a difference, to the assessment of seriousness or significance under Stage 1, so as to warrant setting the FTT Decision aside.
(1) The preceding order and the unless order required the appellant to serve the witness statement on HMRC. It did not do so until 19 November 2019 (when the signed statement was served). There was thus no effect on the length of delay in correcting the breach (and therefore its seriousness) - particularly in light of FTT’s reasoning for purpose of serving witness statements. Moreover, even if HMRC had been served with the unsigned witness statement on 8 October 2019 that was still, in the context of the underlying breach, many weeks after the deadline specified in the third unless order. (We take this deadline to be 15 August 2019 being two weeks before 29 August 2019 - that was the date Mr Brown e-mailed the FTT and in relation to which the FTT said was two weeks after the extended deadline had expired (FTT [23] summarised at [6(9)] above)).
(2) In any event, a breach of an unless order is “undoubtedly a pointer towards” the breach being considered serious and significant (British Gas ([41]). In this case, taking account of prior breach(es) simply makes the position worse as it is evidence of successive breaches of the same requirement. The fourth unless order was the culmination of a series of escalating steps the tribunal took, in case-managing the matter, which all in one way or another related to the same failure. This is not thus a point about the appellant’s general compliance history (which as was made clear in Denton [27] was better addressed at Stage 3) but successive non-compliance with the same obligation. Even putting the situation at its lowest, this was the breach of the third of a series of unless orders which the tribunal made which required compliance by 15 August 2019. A conclusion that the breach was serious and significant is all the more apparent given the breach of the second unless order concerned the same issue - failure to serve witness statements. In addition, although the first unless order was complied with, it is relevant to note that the unless order only came about because of non-compliance with the tribunal’s directions which had included the service of witness statements.
(3) The Unless Order also specifically required the appellant to serve a signed witness statement. As the FTT correctly took into account, that requirement in the unless order was not complied with. (The test in British Gas, which requires the tribunal to consider the failure to carry out the original obligation, does not mean that the tribunal should not consider failure to comply with the unless order as well (see [40])). That requirement for signature was important given the appellant’s past failures." (Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)
Direction based on a misunderstanding of a party’s position
“I have considered whether, in the circumstances, I should refuse to set aside the direction but I have concluded that I should set it aside because not only are HMRC entitled to know the reasons why the order was made but, more fundamentally, I had made the order based on a misunderstanding of HMRC’s position. It seems to me that a refusal to set aside the direction in such circumstances would not be consistent with the overriding objective of the UT Rules, as set out in rule 2(1), of applying those rules to enable the UT to deal with cases fairly and justly.” (Drummond v. HMRC [2016] UKUT 221 (TCC), §40, Judge Sinfield)
Outside the reasonable range
Decision with consequences that Parliament cannot have intended
“A discretion may be impugned if the tribunal or court has not taken into consideration a factor which it should; alternatively, has taken into consideration a factor which it should not, or where the decision taken is one which the framers of the legislation, pursuant to which its decision has been taken, could not have intended the very consequence that the decision has had. That is a rather long way of stating that the decision was perverse or illogical.” (Maharani Restaurant v. CEC [1999] STC 295 at 299).
Principle against taking advantage of your own subsequent conduct
“If the order can be justified in terms of those factors which the tribunal should have considered, those factors which the tribunal ought not to have considered, and its decision overall was in accordance with the law and not irrational, then the mere fact that one party to that decision takes steps which are open to it, which leads to a prolongation of the proceedings cannot invalidate the order which is sought to be impugned by the statutory process of appeal.” (Maharani Restaurant v. CEC [1999] STC 295 at 299).
Incorrectly admitted evidence
Assess whether FTT could have reasonably made its findings without the documents
“In assessing for ourselves therefore the extent to which the FTT could reasonably have made its findings, we shall proceed on the basis that none of the supporting transaction enquiry reports were properly before the FTT.” (Eyedial Limited v. HMRC [2013] UKUT 432 (TCC), §44, Judges Berner and Hellier).
Or the test is whether the Court is quite satisfied that the error made no difference
"[21] This was a full and very carefully considered judgment. However, it would nonetheless be appropriate for an appellate court to interfere with it, if it could be shown that irrelevant material was taken into account, relevant material was ignored (unless the appellate court was quite satisfied that the error made no difference to the decision), there had been a failure to apply the right principles, or if the decision was one which no reasonable tribunal could have reached. Ms Simor has argued that there were a number of errors in the judgment, and also that the ultimate decision was outside the bounds of what a reasonable tribunal could have decided." (HMRC v. BPP Holdings Ltd [2017] UKSC 55, Lord Neuberger)
Same duty to provide reasons applies to case management decisions
“That is a judgment which, in our view, contains assertions rather than reasons and just as the principle upon which this appeal tribunal should operate in relation to appeals from interlocutory decisions is the same as the principle which we ought to apply in hearing appeals from final decisions, so it seems to us, the parties are entitled to be told why they have won or lost in an interlocutory decision as much as in a final one. True it is that in an interlocutory decision one would not seek for any great detail, but we do think that something rather more explicit is called for, especially where, as here, there has been a skilful and helpful argument adduced on a point that is both interesting and difficult.” (Independent Research Services Ltd v. Catterall [1993] ICR 1, Knox J).
But need not deal with every argument
“there is no duty on a judge, in giving his reasons, to deal with every argument presented by counsel in support of his case. It is sufficient if what he says shows the parties…the basis on which he has acted, and if it be that the judge has not dealt with some particular argument but it can be seen that there are grounds on which he would have been entitled to reject it, this court should assume that he acted on those grounds unless the appellant can point to convincing reasons leading to a contrary conclusion.” (Eagil Trust Co Ltd v. Pigott-Brown [1985] 3 All ER 119, at 122, cited in Hague Plant Ltd v. Hague [2014] EWCA Civ 1609, §4, Briggs LJ).
- Must explain why Judge is treating apparently similar situations differently
"[38]...The Judge identified two aspects of "novelty" in the amendment of pleadings the Claimant sought. He went on to identify these amendments as "late" or "very late". But he did not then expressly apply the relevant legal tests for late amendments set out at para.10 of Pearce and elsewhere in the authorities. Instead, having canvassed the issue of timetable, he concluded that the prejudice to the Claimant in "being refused leave to advance what may be weighty points in her favour" was clearly outweighed by considerations of justice and procedural fairness to both sides. However, he then went on to allow some amendments and refused others without explaining the relevant difference between them which lead him to that decision. Mr Lambert says the ruling is accordingly impossible to understand.
[39] I see force in that analysis. It seems to me to be at the root of the submissions made by both parties before me. The logic of the decision under challenge is elusive, and consequently the momentum of that logic, in terms of where it should have led the Judge, is also elusive.
...
[44] There is a further problem. I also see force in Mr Chapman's submissions that having identified novelty and timetable as the key issues, it is not clear why either issue was handled as it was." (Idziak v. Merlin Entertainments Plc [2024] EWHC 1351 (KB), Collins Rice J)
Appeal against decision to vary previous direction (no broad margin of appreciation)
"[41] HMRC submit that this was essentially a case management decision, where a broad margin of appreciation should be afforded to the Judge’s decision. But this was not a case management decision of the kind to which that approach is adopted, where the judge has a broad discretion to exercise. As HMRC otherwise accept, the Judge’s discretion was “heavily curtailed” by the principle explained in Tibbles. The question of whether this was one of those rare cases not falling within established exceptions justifying re-arguing a case was a narrower exercise of judgment, against the particular background of the appeal to the Upper Tribunal and the pending appeal to the Court of Appeal." (Gardner Shaw UK Ltd v. HMRC [2018] UKUT 419 (TCC), Fancourt J and Judge Hellier)
Even if error of law identified give weight to judge’s conclusion
“Furthermore, even if the FTT did err in law, the Upper Tribunal should in my judgment still accord as much weight as it properly can to the FTT’s assessment [of whether to allow additional cross-examination]. They have been hearing the case for over five weeks, and they are the body charged by Parliament with its determination. Inevitably, the Decision, produced under great time pressure, cannot contain a complete record of all the factors which they took into consideration and how they balanced them.” (Ingenious Games LLP v. HMRC [2015] UKUT 105 (TCC), §68, Henderson J).
Appeals to be conducted with economy in mind
“there is a real need to conduct appeals about case management decisions with economy and, wherever possible brevity.” (Hague Plant Ltd v. Hague [2014] EWCA Civ 1609, §3, Briggs LJ).
Appellant may change direction sought on appeal as well as grounds (if procedurally fair)
“the Appellants have the right to appeal from the Decision if it is erroneous in point of law. That right is not removed merely because they have changed their mind about the relief which they wish to obtain. Furthermore, there is a wider public interest in play (namely the interest of the general body of taxpayers that the tax system should operate correctly, in matters of both substance and procedure) which tells strongly in favour of allowing an appeal to proceed, if an error of law might thereby be correct. There is of course a separate question whether an appellant should be allowed to rely on grounds different from those which were argued below, but that is essentially a question of procedural fairness to be decided in accordance with the overriding objective.” (Ingenious Games LLP v. HMRC [2015] UKUT 105 (TCC), §61, Henderson J – Appellant changed from asking for an adjournment to deal with allegations of honesty to arguing the allegations should not be admitted as too late).
Examples
- Decision to defer determination of interlocutory costs application reasonable
"[60] When the focus is placed on the decision that the FTT did make, we see no error of principle or approach. It was not obliged to decide costs there and then as we have concluded at [53] above. It decided to defer the consideration of the costs issue to enable Worldpay to make good its submission that none of the material that had recently been disclosed had any bearing on HMRC’s newly pleaded case. That, in our judgment, was an entirely appropriate exercise of discretion and indeed very similar to the exercise of discretion which the Court of Appeal, at paragraph [60] of Crown Bidco, indicated could be appropriate." (Worldpay UK Limited v. HMRC [2020] UKUT 290 (TCC), Judge Richards and Judge Cannan)
- No error in refusing admit late new ground of appeal and evidence
"[186] We are satisfied that there was no error of law in the FTT’s case management decision and it was not close to being plainly wrong. It performed a multifactorial assessment taking into account: the lateness of the application; the reason for this, the reliability of the material to be presented; the practical consequences of it needing to be tested and HMRC filing evidence in reply; the prejudice to HMRC in admitting the material; and the overriding objective - whether it was just and fair to both parties to admit the evidence and consider the appeal ground. It gave more than sufficient reasons in its decision at [275]-[284] as set out above." (Caerdav Ltd v. HMRC [2023] UKUT 179 (TCC), Rajah J and Judge Ruper Jones)
- Decision as to sufficiency of pleading of serious conduct plainly a matter of judgment
"[63] ... As to the FTT’s view regarding the sufficiency of HMRC’s statement of the primary facts, the FTT was clearly satisfied that the Statement of Case and evidence had done enough to make the primary facts clear. That was plainly a matter of judgment and nothing in Ammanford’s grounds demonstrated why it was not open to the FTT to reach that conclusion." (Ammanford Recycling Limited v. HMRC [2023] UKUT 302 (TCC), Judges Raghavan and Greenbank)
- Start date of trial
"[56] The suggestion now canvassed in the Kop defendants' skeleton argument that the trial should not begin until 2014 is later than any of the dates canvassed before the judge. Given the way that the rival cases were presented to the judge, I consider that he was realistic in deciding that the choice before him was between April and October 2013. In my judgment, it was a proper exercise of his discretion in the circumstances in which he found himself to choose April. There was no evidence before him that an April date would cause hardship to the Kop defendants. Mr Malek appears to me to have accepted that an April start date was possible. That was certainly how Mr Harris and the judge interpreted what he had said and they were not contradicted. The judge balanced the factors that were put to him as relevant to the exercise of his discretion. It came to what he plainly regarded as the least worst solution. I would refuse permission to appeal on this ground." (Kop Football (Cayman) Limited v. Hicks [2012] EWCA Civ 1743, Lewison LJ)
- Whether to decide appeal on the papers or hold a hearing
"[39] I am also satisfied that the Applicant was given a reasonable opportunity to attend a hearing in person or by video but declined it. The procedure adopted was just and fair. It was clear that the Applicant did not require a telephone hearing even if he raised the potential as an alternative. Most importantly, and in any event, he consented to a paper determination without a hearing. It was fair for the FTT to proceed on the papers without a telephone hearing for reasons it gave. The procedure was fair to both parties because the FTT had to decide the reliability and credibility of all witnesses and the weight to be given to their evidence based on written statements and written answers to the questions. This was the closest to cross examination that could be adopted without an oral hearing. The FTT made a case management decision that was rational and it took into account material matters when exercising its discretion.
[40] In conclusion, the general complaint of procedural unfairness based upon proceeding to determine the appeal on the papers without a hearing, does not give rise to an arguably material error of law in the FTT’s Decision. I agree with the matters relied upon by the FTT at paragraph 6 of the PTA Decision. The FTT therefore applied Rules 29 and 2 without arguable error of law." (Mayet v. HMRC [2025] UKUT 377 (TCC), Judge Rupert Jones, PTA)
- How inquisitorial the FTT's role should be
"[49] While there is an inquisitorial nature to some appeals before the FTT (Tax Chamber), the extent of the duty varies greatly between unrepresented litigants who may be unsophisticated, unfamiliar with tax or live with disabilities as opposed to global corporate litigants who are represented by large and expert legal teams. The extent of the duty all depends on the facts of any case and fairness is key. How much of an inquisitorial role the FTT should adopt is therefore also a matter of discretion and thus the threshold for interference is high.
[50] The FTT was clearly cognisant of the need to take a reasonably and proportionately inquisitorial approach and did so. I have referred above to the passages of the Decision where it sets out the method it adopted for posing questions of the Applicant in writing in advance of the determination and based upon the written evidence it had received. In addition, at [6(4)] of the FTT’s refusal for permission appeal it also stated: “In order to ensure that the Appellant was fairly treated I reminded HMRC when producing their skeleton argument of their duties when appearing against an unrepresented party that they should be thorough in their references to case law drawing my attention to all relevant case law. I am satisfied that HMRC’s skeleton argument did as directed.”
[51] The FTT adopted reasonable and proportionate measures to demonstrate flexibility in its procedure. It is not arguable that it erred or that it should have adopted a more inquisitorial approach within the confines of a paper determination." (Mayet v. HMRC [2025] UKUT 377 (TCC), Judge Rupert Jones, PTA)