Giles Ellis v The Commissioners for HMRC
[2023] UKFTT 388 (TC)
Ebuyer (UK) Limited v The Commissioners for HMRC
4 July 2023
[2023] UKFTT 611 (TC)
First-tier Tribunal
HMRC didn't give Ebuyer all the documents the court ordered them to. The court said this was a big deal and punished HMRC by preventing them from taking part in the case anymore. The court said HMRC's excuses weren't good enough, even though it was a really old case.
Key Facts
- •HMRC failed to comply with an Unless Order (issued 10 December 2021) requiring disclosure of documents in an appeal by Ebuyer (UK) Limited concerning VAT assessments totaling approximately £6.7m.
- •The Unless Order included an automatic bar on further participation if HMRC failed to comply.
- •HMRC conceded non-compliance with the Unless Order and applied for relief from sanctions.
- •The dispute involved issues of time bar (s.73(6)(b) Value Added Tax Act 1994) and Ebuyer's knowledge of fraudulent VAT evasion by its suppliers.
- •HMRC's non-compliance included the omission of seven documents and a failure to disclose further documents related to due diligence and knowledge issues.
- •The case had a lengthy history, including appeals to the Upper Tribunal and Court of Appeal.
Legal Principles
Relief from sanctions
Rule 8 of the FTT Procedure Rules
Denton v TH White Ltd [2014] EWCA Civ 906 three-stage test for relief from sanctions: (1) seriousness and significance of the breach; (2) reasons for the default; (3) all circumstances of the case.
Denton v TH White Ltd [2014] EWCA Civ 906
Application of Denton principles in tax appeals.
BPP Holdings Ltd v Revenue and Customs Commissioners [2015] UKSC
Breach of an unless order is a pointer towards seriousness and significance, but not automatic.
British Gas Trading Ltd v Oak Cash & Carry Ltd [2016] EWCA Civ 153
Self-certification of relevance in disclosure; disputes dealt with in later application.
Tower Bridge GP Ltd v Revenue and Customs [2016] UKFTT 54 (TC)
Outcomes
HMRC's application for relief from sanctions denied.
HMRC's breach of the Unless Order was serious and significant due to the omission of seven key documents and the failure to disclose further relevant documents related to due diligence and knowledge. The reasons offered for the non-compliance were not considered sufficient, particularly given the lengthy history of delays and previous warnings. The overall prejudice to Ebuyer and the efficient use of court time outweighed the public interest in HMRC pursuing the appeal.
HMRC barred from further participation in the proceedings.
The terms of the Unless Order were applied, resulting in HMRC's exclusion from the proceedings due to their failure to comply with the disclosure requirements.
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