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L5. Nature of supervisory jurisdiction

Materials to be taken into account under supervisory approach


Only materials that were before HMRC

"[14]...The burden lies on the taxpayer to demonstrate this, based on facts and matters available to HMRC at the time the decision was taken." (HMRC v. Boyce [2017] UKUT 177 (TCC), Arnold J)

“It is established that the tribunal, when it is considering a case where the commissioners have a discretion, exercises a supervisory jurisdiction over the exercise by the commissioners of that discretion.  It is not an original discretion of the tribunal; it is one where it sees whether the commissioners have exercised their discretion in a defensible manner.  That is the accepted law in this branch of the court’s jurisdiction, and indeed it has recently been decided that the supervisory jurisdiction is to be exercised in relation to materials which were before the commissioners, rather than in relation to later material…” (Kohanzad v. CEC [1994] STC 968 at 969d per Schiemann J)


"[90] The proviso to regulation 29(2) confers a discretion on HMRC to accept alternative evidence to the purchase invoice which a person claiming deduction of input tax must ordinarily have. The exercise of such a discretion can only be challenged by the taxpayer on the ground that it was a decision that no reasonable body of Commissioners could have reached. The burden lies on the taxpayer to demonstrate this, based on facts and matters available to HMRC at the time the decision was taken.  (Boyce at [14].)" (Stonypath Developments Ltd v. HMRC [2020] UKFTT 251 (TC), Judge Staker)

“I also accept that the Tribunal’s jurisdiction must be exercised in relation to materials that were before HMRC when the decision that is the subject of the appeal was made rather than in relation to later material (see the discussion of the point in Taygroup Ltd v HMRC [2013] UKFTT 336 (TC) at [27] – [30] and the cases cited therein).” (London Cellular Communications Ltd v. HMRC [2014] UKFTT 272 (TC), §19)


“Does HMRC have an obligation to make enquiries of the claimant?... there is no requirement that consideration be given to information in HMRC’s possession which was neither provided with the claim (TMA Sch 1AB para 3A(8)) nor provided during discussions about the claim or directly to the Review Officer (TMA s 49E).” (Currie v. HMRC [2014] UKFTT 882 (TC), §37).

“The cases show that we must limit ourselves to a consideration of the facts and matters which were known when the disputed decision was made, so we cannot take account of developments since that time, and that we may not exercise a fresh discussion.” (Southend United FC Ltd v. HMRC [2013] UKFTT 715 (TC), Judge Bishopp).

Except where Tribunal has power to direct a review


"[19]...Thus, the role of the FTT in these appeals will be to decide for itself any disputed primary facts on which HMRC's decision was based and then consider whether the refusal to grant approval was one which a reasonable officer could make on the basis of the facts as found." (Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)

"Strictly speaking, it appears that under s 16(4) of the 1994 Act, the Tribunal would be limited to considering whether there was sufficient evidence to support the Commissioners' finding of blameworthiness.  However, in practice, given the power of the Tribunal to carry out a fact-finding exercise, the Tribunal could decide for itself this primary fact.  The Tribunal should then go on to decide whether, in the light of its findings of fact, the decision on restoration was reasonable.  The Commissioners would not challenge such an approach and would conduct a further review in accordance with the findings of the Tribunal". (Gora & Others v Customs & Excise Commissioners [2003] EWCA Civ 525)

"In appeals of this kind, the Tribunal determines for itself on the basis of the evidence before it the primary facts relevant to the decision, to the extent that these are in dispute between the parties (Continental at [44], [47]; Casa Di Vini v Revenue & Customs [2021] UKFTT 11 (TC) at [55]-[57]).  If the Tribunal makes findings of material primary facts that are in contradiction to the facts found or assumed in the HMRC decision under appeal, and on which the HMRC decision is wholly or partly based, then the decision maker will have failed to take into account relevant considerations (the correct facts as found by the Tribunal), and the decision will likely be one which no reasonable officer of HMRC could have reached in the circumstances.  If the Tribunal makes findings of material primary facts that the decision under appeal did not consider at all, the decision maker will have failed to take into account relevant considerations." (Hare Wines Limited v. HMRC [2022] UKFTT 176 (TC), Judge Staker)

“There is authority that the tribunal may assess whether a decision has been reasonably arrived at on the basis of its findings on the primary facts, where relevant, taking into account new evidence presented even though it was not before the decision-maker.” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §310, Judge Morgan).


“So the "normal" position is to consider the reviewing officer's decision in light of the information known to him at the time of making the decision. Although this was not mentioned in Gora, one rationale for the different approach in Gora might arise from the sanctions available to the Tribunal under Section 16(4) Finance Act 1994.” (Montshiwa v. HMRC [2015] UKFTT 544 (TC), §§27…28, Judge Popplewell).


“There is one other oddity about this procedure.  We are required to determine whether or not the UKBA's decision was "unreasonable"; normally such an exercise is performed by looking at the evidence before the decision maker and considering whether he took into account all relevant matters, included none that were irrelevant, made no mistake of law, and came to a decision to which a reasonable Tribunal could have come.  But we are a fact finding Tribunal, and in Gora and others v Customs & Excise Commissioners [2003] EWCA Civ 525 Pill LJ approved an approach under which the Tribunal should decide the primary facts and then decide whether, in the light of the Tribunal's findings, the decision on restoration was in that sense reasonable.  Thus we may find a decision is "unreasonable" even if the Officer had been, by reference to what was before him, perfectly reasonable in all senses." (Harris v Director of Border Revenue [2013] UKFTT 134 (TC), §11).

Not limited to making findings and additional evidence in relation to facts that were taken into account

"[33] ... But we do not consider that this demonstrates that Pill LJ was seeking to limit the scope of the primary facts that the FTT could find to those that have, as Mr Glover put it, “exercised the mind of the decision maker”. Such a limitation would sit oddly with the remainder of Pill LJ’s judgment. Pill LJ was concluding that the Tribunal had the power to decide, as a matter of primary fact, whether the taxpayer was “blameworthy” and determine, in the light of that finding, whether the administrative decision of HM Customs & Excise, to refuse to restore seized goods, was reasonable. Yet, on the Company’s interpretation of Pill LJ’s judgment, if HM Customs & Excise had completely ignored highly relevant indications of a lack of blameworthiness, the tribunal would not be able to make factual findings as to the presence or absence of those indications because they had not “exercised the mind of the decision maker”. That would be a strange conclusion which would deprive the tribunal of any meaningful ability in such a case to determine that HMRC’s administrative decision was unreasonable." (Prospect Origin Limited v. HMRC [2021] UKUT 51 (TCC), Judge Richards and Judge Brannan)

But see:

"[45] [HMRC] submits that the Tribunal may also make findings of fact in relation to (and take into account) matters arising after the date of the decision if this sheds light on the facts in existence at the time of the decision. Although the skeleton argument prepared by Counsel on behalf of Continental for the postponed hearing in 2021 takes a similar view, Mr Dhingra’s position at the hearing was that events occurring after the date of the decision should not be taken into account.


[52] However, looking at paragraph [36] of the decision in Prospect Origin, all this demonstrates is that the Tribunal can and should take into account evidence which will assist in making findings of fact in respect of matters which formed part of the reasons for the decision (in Gora, the extent of the blameworthiness of the appellant) even if that evidence was not known to the decision maker. What it does not do is to suggest that a fact not known to the decision maker can be taken into account if it constitutes a completely separate reason for the decision which was unknown to the decision maker.


[76]   In our view, even if Gora is authority for the proposition that the Tribunal’s fact finding jurisdiction in appeals under s 16(4) FA94 extends to facts which were in existence at the time of the relevant decision but which were not known by HMRC (in respect of which, for the reasons set out above, we have some doubt), there is nothing in Gora which provides any suggestion that the Tribunal can make findings of fact in relation to matters which have occurred subsequent to the date of that decision, whether for the purpose of shedding light on the facts as they existed at the time the decision was made or for any other purpose.  Given the very clear position (explained by Dyson J in Peachtree) that, based on administrative law principles, no account should be taken of facts or matters arising subsequent to the taking of the decision, we do not find this surprising.


[85]   Our conclusion therefore is that facts and matters which arise after the date of the decision which is being appealed cannot be taken into account whether or not they might be said to shed light on the facts on which the original decision was based." (Continental Cash & Carry Limited v. HMRC [2022] UKFTT 49 (TC), Judge Robin Vos)

Query whether a broader approach should be taken

"[18] The inspector’s opinion about the risk, and the reasons why he formed it and served the notice, could be relevant as part of the evidence shedding light on whether the risk existed, but I can see no good reason for confining the tribunal’s consideration to the material that was, or should have been, available to the inspector. It must, in my view, be entitled to have regard to other evidence which assists in ascertaining what the risk in fact was. If, as in this case, the evidence shows that there was no risk at the material time, then, notwithstanding that the inspector was fully justified in serving the notice, it will be modified or cancelled as the situation requires.


[23] The appellant argues that, in practice, confining the tribunal’s role narrowly would not cause any problems because, provided with convincing evidence that there was in fact no risk, the inspector would recognise that and not seek to enforce the notice, although the notice would still be registered on the public database because, the appellant argues, that is appropriate to reflect the fact that it was correctly served on the basis of the information then available to the inspector. This suggested solution does not, in my view, address the problem. The notice would still have the capacity to damage the reputation of the employer and his ability to do business. Furthermore, it cannot be right, in circumstances such as these, that the employer continues, after his appeal is concluded, to be exposed to the possibility of criminal proceedings, however improbable it is that proceedings would actually be taken. In addition, the appellant’s proposal proceeds upon the basis that the inspector is able to accept the evidence put forward subsequently by the employer, but he may not be able to do so. In those circumstances, a forum is required in which to determine the continuing dispute between the inspector and the employer or, putting it more constructively and in the spirit of the health and safety legislation, to determine whether the circumstances that concerned the inspector did in fact give rise to a relevant risk. The appeal process provides that necessary forum.

[24] I would therefore interpret section 24 of the 1974 Act as the Inner House did. In my view, on an appeal under section 24, the tribunal is not limited to considering the matter on the basis of the material which was or should have been available to the inspector. It is entitled to take into account all the available evidence relevant to the state of affairs at the time of the service of the prohibition notice, including information coming to light after it was served. I would accordingly dismiss the appeal." (HM Inspector of Health and Safety v. Chevron North Sea Ltd [2018] UKSC 7)

Materials to be taken into account under supervisory approach

- Duty of decision-maker to acquaint himself/herself with relevant information

"[The taxpayer] submitted that the following principles, which have been held to be applicable in a judicial review context, also apply here.
(1)   A decision-maker must take reasonable steps to acquaint himself with the relevant information to enable him to exercise his discretion.  He cited Secretary of State for Education and Science v Tameside MBC [1976] UKHL 6 [1977] AC 1014 at 1065 where it was said that the question was did the decision-maker “ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly”.  He also referred to Naraynsingh v Commissioner of Police (Trinidad and Tobago) [2003] UKPC 20 where, at [23], it was held that it would not always be necessary for the decision-maker to ascertain more about the circumstances (as to which he was inclined to revoke a licence in that case) but “where, as here, further information obviously was available and there are a number of puzzling features of the case….then a fair procedure demanded that further inquiries be made...”… As the approach required under s 16(4) is akin to the approach in judicial review proceedings, it seems to us that that these principles are equally applicable here.  The wording of the statutory test, in looking at whether a decision has been “reasonably arrived at” is broad enough to encompass considerations such as whether the decision-maker has taken reasonable steps to obtain and acquaint himself with relevant information and whether he was properly applying himself to the decision making process.” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §§320…321 Judge Morgan).

- Duty of decision-maker to acquaint himself/herself with relevant information

General statements of supervisory grounds


See further J9: Grounds of Review 

"[4] It was common ground that the jurisdiction of the Tribunal in an appeal under section 16 FA 1994 is, as summarised in Revenue and Customs Commissioners v Ahmed (t/a Beehive Stores) [2017] UKUT 359 (TCC) at [22]:

"[22] Consequently, the FTT only has a supervisory rather than a full merits jurisdiction in relation to the decisions which are the subject of this appeal. The correct approach to determine the question as to whether the decision concerned could not reasonably have been arrived at is that set out in Customs and Excise Commissioners v J H Corbitt (Numismatists) Ltd [1980] 2 WLR 753 at 663 which is to address the following questions:

(1)          Did the officers reach decisions which no reasonable officer could have reached?

(2)          Do the decisions betray an error of law material to the decision?

(3)          Did the officers take into account all relevant considerations?

(4)     Did the officers leave out of account all irrelevant considerations?" (Betindex Limited v. HMRC [2024] UKFTT 222 (TC), Judge Baldwin)

“As set out in Customs and Excise Commissioners v J H Corbitt (Numismatists ) Ltd [1980] 2 WLR 753 at 663, in relation to a review of a restoration decision, under s 16(4), the questions we must address are:  
(1)   Did the officer reach a decision which no reasonable officer could have reached?
(2)   Does the decision betray an error of law material to the decision? 
(3)   Did the officer take into account all relevant considerations? 
(4)   Did the officer leave out of account all irrelevant considerations?” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §308, Judge Morgan).

General statements of supervisory grounds

Error of law​


See above, General statements of supervisory grounds, above and J9: Grounds of Review 

Error of law​

- Incorrect view that HMRC had no power to do something requested


 "[54] The Decision was made because HMRC considered that they did not have power under section 165(3) FA 2014 to agree to a non-standard accounting period with retrospective application.  It, therefore, betrayed an error of law.  As it was the only reason given for the Decision, that error of law was material.


[56] For the reasons set out above, we are satisfied that the Decision betrays a material error of law on its face, and accordingly is one which HMRC could not reasonably have arrived at." (Betindex Limited v. HMRC [2024] UKFTT 222 (TC), Judge Baldwin)

- Incorrect view that HMRC had no power to do something requested

Inappropriate and unjustified weight to particular factors

“The parties were agreed that a decision may be unreasonable if inappropriate and unjustified weight is given to particular factors, such that no reasonable decision-maker could have acted in such a fashion…” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §309 Judge Morgan).


“Having considered the above the Tribunal decided that the Review Officer’s decision was unreasonable in that the Review Officer failed to direct herself correctly.  She gave inappropriate and unjustified weight to her belief that the driver and operator were aware that they were carrying tobacco, and this formed the foundation of all her subsequent judgements.  She also gave undue weight to the response from the director of Dooa that he was not expecting a consignment of tobacco and never dealt in the product.” (MOTO Transport SP Z OO v. Director of Border Revenue [2016] UKFTT 719 (TC), §42, Judge Gillett).

Inappropriate and unjustified weight to particular factors

Relevant and irrelevant considerations

“… the Commissioners will not arrive reasonably at a decision if they take into account irrelevant matters, or fail to take into account all relevant matters” (Lindsay v. CCE [2002] EWCA Civ 267, §40, Lord Phillips MR).


FTT to decide what are irrelevant and relevant considerations


“We do not see how the tribunal could form a view as to whether HMRC has taken into account relevant or irrelevant considerations without forming a view on what is and is not relevant.  It is inherent in the very exercise required.” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §319 Judge Morgan).


That factor was taken into account must appear on face of the decision


“We consider that a reasonable decision maker expressly takes into account all the known facts and we find that Officer Collins’ decision letter does not refer to material matters which he told the Tribunal were in his mind when he made his decision.  In particular, the decision letter does not refer to any consideration of the fact that there had been a procedural error by Officer Meade which led to the Appellants being given misleading information and not being given an opportunity to explain themselves at interview.  In these circumstances we cannot be satisfied that the decision of 5 July 2013 was reasonable because there is no indication on the face of the letter that Officer Collins considered whether the accepted procedural errors by UKBA amounted to exceptional circumstances for restoration.” (Samson v. Director of Border Revenue [2014] UKFTT 179 (TC), §19, Judge McKenna).


Failure to consider proportionality


“Ms Martin does not appear to have taken any account of proportionality, a topic which is not mentioned in either her review letter or in her witness statement. In our view it is obvious beyond argument that to deprive an otherwise compliant trader of a substantial quantity of goods for a trivial and, as we are satisfied, inadvertent breach of a condition, when there is no identifiable risk to the revenue, is a wholly disproportionate response. Had the officers concerned, and Ms Martin in particular, looked at the entire picture rather than, as they did, focussed on the breach of the condition to the exclusion of all else they could only have reached the same conclusion themselves.” (United Wholesale (Scotland) Limited v. HMRC [2017] UKFTT 70 (TC), §35, Judgre Bishopp)


“We also remind ourselves that in Pusinskas v Border Force [2017] UKFTT 172  (TC) this Tribunal found at [25] that a restoration decision (as well as a forfeiture or condemnation decision) would be flawed and not lawfully arrived at absent a full and proper consideration of the principle of proportionality by the person taking the relevant decision…” (Visao Limited v. HMRC [2017] UKFTT 321 (TC), §16, Judge Geraint Jones QC).


“We cannot, on any fair and proper reading of this Review Decision, find anything that suggests that the Reviewing Officer turned her mind to the issue of proportionality. That, of itself, renders this Review Decision flawed so that we must direct that it ceases to have effect.” (Pusinskas v. Director of Border Revenue [2017] UKFTT 172 (TC), §25, Judge Geraint Jones QC).


Policy applied does not deal with the specific situation


“If the Respondent’s policy expressly dealt with all such circumstances, then it may have been sufficient for the decision maker to apply the policy, and to note that the present case presents no particular circumstances that take it outside the terms of the general policy.  However, the Respondent has not produced its policy in these proceedings, and the very short summary of the policy set out in the challenged decisions does not indicate that the policy itself does address all of these types of considerations.  In the circumstances, the decision itself should by its own wording show that all of these circumstances have been considered and taken into account.” (Tkachenko v. Director of Border Revenue [2017] UKFTT 701 (TC), §45, Judge Staker).

Duty to consider representations


“A decision-maker who gives the person the opportunity to make representations must properly consider those representations and engage with them.  This was on the basis of Mackenzie, R (on the application of) v Secretary of State for Justice [2009] EWCA Civ 669 where, at [34], the decision-maker was criticised because he did not consider an argument put forward by the affected person such that he “thus failed to engage with the case being put forward… a significant respect”. It was also noted that while this point was not essential to the court’s conclusion, the decision-maker’s failure to engage “may undermine his assessment of risk in other respects.” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §320 Judge Morgan).


Duty not to be influenced by oblique motives


“An exercise of discretion is improper if it has been influenced by an oblique motive of hurrying in order to be able to move on to some other matter on the basis of R v Wellingborough Magistrates Court, ex parte Francois (1994) JP 813 where it was held that: “The real question here, in the light of the authorities, is whether what she did was a proper exercise of discretion.  It seems to me that she clearly had an oblique motive, brought about by being in a hurry to finish this case and go on to another case.  In my judgment that oblique motive was her real reason, and it was an improper exercise of discretion.”” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §320 Judge Morgan).

Relevant and irrelevant considerations

Unreasonable or irrational decision​


Flexible standard


“The common law no longer insists on the uniform application of the rigid test of irrationality once thought applicable under the so-called Wednesbury principle. The nature of judicial review in every case depends upon the context. The change in this respect was heralded by Lord Bridge of Harwich said in R v Secretary of State for the Home Department, Ex p Bugdaycay [1987] AC 514, 531 where he indicated that, subject to the weight to be given to a primary decision-maker's findings of fact and exercise of discretion, "the court must … be entitled to subject an administrative decision to the more rigorous examination, to ensure that it is in no way flawed, according to the gravity of the issue which the decision determines".” (Kennedy v. Charity Commission [2014] UKSC 20, §51)


“For example, the CAT was right to observe that its approach should reflect the "specific context" in which it had been created as a specialised tribunal (paras 224); but it was wrong to suggest that this permitted it to discard established case-law relating to "reasonableness" in administrative law, in favour of the "ordinary and natural meaning" of that word (para 225). Its instinctive wish for a more flexible approach than Wednesbury would have found more solid support in the textbook discussions of the subject, which emphasise the flexibility of the legal concept of "reasonableness" dependent on the statutory context (see De Smith para 13-055ff "The intensity of review"; cf Wade p 364ff "The standard of reasonableness", and the comments of Lord Lowry in R v Secretary of State ex p Brind [1991] 1AC 696, 765ff).” (IBA Health Ltd v Office of Fair Trading [2004] EWCA Civ 142, §90).


Political judgment: low intensity of review


“Thus, at one end of the spectrum, a "low intensity" of review is applied to cases involving issues "depending essentially on political judgment" (de Smith para 13-056-7). Examples are R v Secretary of State, ex p Nottinghamshire CC [1986] AC 240, and R –v- Secretary of State ex p Hammersmith and Fulham LBC [1991] 1AC 521, where the decisions related to a matter of national economic policy, and the court would not intervene outside of "the extremes of bad faith, improper motive or manifest absurdity" ([1991] 1AC at 596-597 per Lord Bridge). At the other end of the spectrum are decisions infringing fundamental rights where unreasonableness is not equated with "absurdity" or "perversity", and a "lower" threshold of unreasonableness is used: "Review is stricter and the courts ask the question posed by the majority in Brind, namely, "whether a reasonable Secretary of State, on the material before him, could conclude that the interference with freedom of expression was justifiable." (De Smith para 13-060, citing Brind –v- Secretary of State [1991] AC 696)."” (IBA Health Ltd v Office of Fair Trading [2004] EWCA Civ 142, §91).

Matters properly within the province of the court: higher intensity


“A further factor relevant to the intensity of review is whether the issue before the Tribunal is one properly within the province of the court. As has often been said, judges are not "equipped by training or experience or furnished with the requisite knowledge or advice" to decide issues depending on administrative or political judgment (see Brind [1991] 1AC at 767, per Lord Lowry). On the other hand where the question is the fairness of a procedure adopted by a decision-maker, the court has been more willing to intervene: "Such questions are to be answered not by reference to Wednesbury unreasonableness, but 'in accordance with the principles of fair procedure which have been developed over the years and of which the courts are the author and sole judge'" (R –v- Takeover Panel ex parte Guinness plc [1990] 1QB 146, 184, per Lloyd LJ)…The present case, as the Tribunal observed (para 223), is not concerned with questions of policy or discretion, which are the normal subject-matter of the Wednesbury test. Under the present regime (unlike the 1973 Act) the issue for the OFT is one of factual judgment. Although the question is expressed as depending on the subjective belief of the OFT, there is no doubt that the court is entitled to enquire whether there was adequate material to support that conclusion (see Tameside case, [1977] AC at 1047 per Lord Wilberforce).” (IBA Health Ltd v Office of Fair Trading [2004] EWCA Civ 142, §§92 - 93).

No fetter of discretion

“[Counsel for HMRC] accepted that the Commissioners could not confine their discretion by the Statement of Practice.” (Best Buys Supplies Ltd v. HMRC [2011] UKUT 497, §77).

Insufficient reasons

“The general position was explained by Sedley J (as he then was) in R v Higher Education Funding Council exp Institute of Dental Surgery [1994] 1 All ER 541 at 666: "In the light of such factors each case will come to rest between two poles or possibly at one of them:  The decision which cries out for reasons, and the decision for which reasons are entirely inapposite.  Somewhere between the two poles, is the dividing line separating those cases in which the balance of factors calls for reasons from those where it does not.  At present there is no sure indication of where the division comes.  Asked to give an example of the kind of decision in which in the light of his submission fairness will not require reasons to be given, Mr Pannick was unable or unwilling, at least without further reflection, to commit himself.  No doubt the common law will develop, as the common law does, case by case.  It is not entirely satisfactory that this should be so, not least because experience suggests that in the absence of a prior principle irreconcilable or inconsistent decisions will emerge.  But from the tenor of the decisions principles will come and if the common law's pragmatism has a virtue it is that these principles are likely to be robust.  At present, however, this court cannot go beyond the proposition that, there being no general obligation to give reasons, there will be decisions for which fairness does not demand reasons.  It follows that in appraising each case, the present included, too catholic an approach will amount to generalising what is still a particular obligation….. though we are not prepared to accept Mr Beloff's contention that it is any longer an exceptional one.”…In my view this was a case where fairness required that reason should be given to explain the  termination of CLAC's authorised tax agency.” (R (oao Lunn) v. HMRC [2011] EWHC 240 (admin), §§56…57).


“Given that the definition of unconscionable means something which is unreasonably "excessive", it is our view that Parliament must have intended that the reviewing officer would give reasons as to why, in the face of a numerical disparity, he considered the excess to be a reasonable one.” (Montshiwa v. HMRC [2015] UKFTT 544 (TC), §118, Judge Popplewell).

“The giving of reasons for a decision is an important administrative and judicial practice. In Gora the Court of Appeal held that the tribunal had erred in law because it did not give sufficient reasons for one of its findings. There is of course a difference between an error of law in reaching a decision and an error of law in not giving sufficient reasons for it, but it seems to us that a decision cannot be called reasonable to the extent that it is not apparent that it is reasoned; and to the extent that part of its reasoning is based on undisclosed material it cannot properly be said to be reasoned…Thus we find that to the extent Miss Bines’ decision relied on the undisclosed material it was unreasonable.” (NAS & Co Ltd v. HMRC [2014] UKFTT 50 (TC), §§99…101, Judge Hellier).


“It is true that the common law "at present", does not recognise a general duty to give reasons for administrative decisions..... however in many cases if a public body, such as HMRC, fails to give reasons for its decision it will be found to have acted unlawfully...n this case, paragraph 17(3)(b) envisages this tribunal having to decide whether HMRC's decision is flawed in the judicial review sense of that term.  A failure to give reasons for a decision makes this task almost impossible.  It would not then be possible to determine whether the decision-maker applied the correct legal test, whether he took into account all relevant factors or whether he took account of irrelevant factors.  In short a failure to give reasons makes it almost impossible for the tribunal to determine the issue of Wednesbury unreasonableness.  Parliament must have envisaged that an officer of HMRC deciding whether to exercise the discretion in paragraph 11 would give reasons for the decision.  For this reason, we consider that the failure by Mr Bains to give reasons for his conclusion that there were no special circumstances with the result that no reduction of the penalty should be made under paragraph 11, meant that HMRC's decision was flawed.” (White v. HMRC [2012] UKFTT 364 (TC), §§68…69).


Decision letter should be a self-standing document that allows recipient to understand reasons 


"[59]...The obligation placed on HMRC in regulation 4(4) of the Wholesaling of Controlled Liquor Regulations 2015 is to give 'the reasons' not the 'key points' for the refusal. The applicant should be able to understand the reasons for the refusal of the application from the refusal letter as a self-standing document. The relationship in the Hare Wines appeal between the Refusal letter and the HMRC Response letter both sent on 20 March 2017 is not explained. The Refusal letter is from Ola Onanuga, who is presumably the decision-maker for the purposes of the global disclosure direction. It states simply that one ground for the refusal is that Mr Hare is involved as the guiding mind of the business but does not say anything about why his involvement is objectionable. The Refusal letter does not expressly incorporate everything in the HMRC Response letter and it does not say whether Ola Onanuga has seen or considered all the information that was available to Edward Fyle who wrote the HMRC Response letter. It is entirely unclear to me, for example, whether the tax loss letters have been relied on by Ola Onanuga as part of the reason why Hare Wines is not fit and proper, or whether Mr Hare's spent conviction has played any part in the decision to refuse as asserted by Mr Fyle but not mentioned in Refusal letter." (Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)

Unreasonable or irrational decision​
No fetter of discretion
Insufficient reasons

Failure to reach an overall, balanced conclusion


"Our view is that it is inherent in the exercise required that the decision-maker must weigh up all considerations in deciding whether a particular factor or factors justifies a conclusion that a person is not fit and proper.  Inevitably that involves balancing considerations pointing one way or the other.  Simply identifying a list of supposed risks as Mr Germaney appeared to do without any assessment of the level of the risk or indeed the nature of the risk is not a proper approach.  We have considered this further below." (Corbelli v. HMRC [2017] UKFTT 615 (TC), §324 Judge Morgan).

Failure to reach an overall, balanced conclusion

Consequences of supervisory ground being made out


Set aside unless decision would have inevitably been the same

“In considering the legality of the decision to revoke the BTI, and in deciding whether to quash it, the Tribunal must take into account that the BTI was wrongly issued and that revocation was the only right course, on the basis of the law then applicable, even though the applicable law has only later been established by the decision of this Tribunal. It cannot, in my judgment, be right to quash as unlawful a decision which was the only lawful decision that could have been taken.” (HMRC v. Invicta Foods Limited [2016] UKUT 1 (TCC), §55, David Richards LJ).


“Without clearer findings, we find ourselves unable to decide whether to accept or reject Mr Brown’s submission that the FTT could not have been sure that the decision of the Commissioners would inevitably have been the same in the light of its finding at [37]. This issue will of course only be relevant if after further consideration the FTT decides that the finding at [37] is supported by the evidence.” (Best Buys Supplies Ltd v. HMRC [2011] UKUT 497, §78).


“The parties also appeared to be agreed that s 16(4) does not require the tribunal to order a further review if HMRC reach a decision on an unreasonable basis but the decision would have been the same on valid grounds.  We note that corresponds with administrative law principles…CW argued that this decision means that where the tribunal determines that the decision-maker did not take into account all relevant considerations and/or took into account irrelevant considerations, the appeal must be allowed unless there is no possibility that the decision would have been different.  On that basis as HMRC accept that an irrelevant consideration was taken into account (the due diligence) the appeal must be allowed unless it is shown that the decision would inevitably have been the same.  HMRC countered that in their view the decision would inevitably have been the same due to the position as regards the seizures, the movements to SC and the debt issue.” (Corbelli v. HMRC [2017] UKFTT 615 (TC), §§313…315, Judge Morgan).


“It is only if the facts are such that the only decision which could possibly result from the exercise of the discretion – that is to say if the result were inevitable – that it would be permissible not to set aside the original decision.” (NAS & Co Ltd v. HMRC [2014] UKFTT 50 (TC), §146, Judge Hellier).


Examples of a different approach


“However, I have decided that HMRC’s decision making process in relation to two of the matters was flawed but that does not necessarily undermine the decision to refuse to approve Roohop under the AWRS.  I have concluded that HMRC correctly took account of Mr Anand’s failure to disclose that Jassim had been refused authorisation under WOWGR and the unsatisfactory nature of the business plan.  On the basis of those two factors, which seem to me to be significant in the context of a fit and proper test, I consider that HMRC were entitled to conclude that they were not satisfied that Roohop is a fit and proper person to carry on the activity of the wholesale of alcoholic liquor and the decision to refuse to approve Roohop under the AWRS was not so plainly wrong that no officer of HMRC, acting reasonably, could have reached it.” (Roohop Ltd v. HMRC [2017] UKFTT 574 (TC), §73, Judge Sinfield).

Consequences of supervisory ground being made out
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