Ataf Iqbal Butt v The Commissioners for HMRC
[2024] UKFTT 893 (TC)
1st Alternative Medical Staffing Ltd v The Commissioners For HMRC
29 August 2024
[2024] UKFTT 788 (TC)
First-tier Tribunal
A company appealed tax assessments. Seven years later, they tried to add a new argument. The judge refused because the new argument was weak, too late, and because a previous court case already decided the core issue.
Key Facts
- •1st Alternative Medical Staffing Ltd appealed VAT assessments totaling £221,325.
- •The appeal was initially based on VAT exemption under Schedule 9, Group 7 of the VAT Act 1994.
- •After a lengthy delay (7 years), the appellant sought to add a new ground of appeal: that the assessment was not made to 'best judgment'.
- •The appellant's judicial review claim, concerning the same VAT assessments, was previously dismissed.
- •The new ground relied on an HMRC officer's letter acknowledging a misunderstanding of VAT exemption requirements.
Legal Principles
Permission to amend grounds of appeal is treated as an application for relief from sanctions.
Denley v HMRC [2017] UKUT 340 (TCC), Asiana Limited v HMRC [2019] UKFTT 267 (TC), CBD Flower Shop v HMRC [2023] UKFTT 00107 (TC)
An amendment will be refused if it has no real prospect of success. The test is the same as for summary judgment.
Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm)
Very late applications to amend require the applicant to demonstrate the strength of the new case and why justice requires its pursuit. Lateness is a significant factor.
Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm)
In 'best judgment' assessments, the tribunal's jurisdiction is initially supervisory (judicial review-like), then fully appellate regarding the assessment amount.
Rahman (trading as Khayam Restaurant) v Customs and Excise Commissioners [2002] EWCA Civ 1881, Mithras (Wine Bars) Limited v C&E Comrs [2010] UKUT 115 (TCC)
A successful 'best judgment' challenge of a judicial review type is extremely rare; there's a presumption that the Commissioners made an honest attempt at a fair assessment.
Mithras (Wine Bars) Limited v C&E Comrs [2010] UKUT 115 (TCC)
Outcomes
The application to add the 'best judgment' ground was refused.
The new ground lacked merit, had no real prospect of success, and was brought after an inordinate and unexplained delay of seven years. The underlying issue was already decided in the dismissed judicial review claim.
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