Samuel Halpern v The Commissioners for HMRC
[2023] UKFTT 959 (TC)
John Stenhouse v The Commissioners for HMRC
24 July 2023
[2023] UKFTT 635 (TC)
First-tier Tribunal
John appealed tax penalties, but the government cancelled them before the court could hear the case. John then wanted the court to force the government to pay him for being incompetent. The court said it couldn't do that, because it only handles tax cases, not complaints about government mistakes. They refused to send the case to a different court because that would skip the usual process for such complaints.
Key Facts
- •Mr. Stenhouse appealed to the FTT against late payment penalties after HMRC had cancelled or reduced them to nil.
- •Mr. Stenhouse sought to continue the proceedings to claim compensation from HMRC for alleged incompetence.
- •HMRC argued the FTT lacked jurisdiction as no appealable decisions remained.
- •The appeal involved multiple payments made by Mr. Stenhouse, some of which were not initially recorded by HMRC.
- •The case centered on HMRC's alleged incompetence, inconsistent statements of account, and delays in processing payments.
- •Mr. Stenhouse claimed the FTT had jurisdiction to award damages under Section 15 of the Tribunals, Courts and Enforcement Act 2007 and to conduct a judicial review.
Legal Principles
The FTT's jurisdiction is entirely statutory and limited to matters where a statute provides a right of appeal.
Tribunals, Courts and Enforcement Act 2007 (TCEA), Section 3
The FTT only has jurisdiction to decide whether penalties have been properly imposed and calculated (Schedule 56 to Finance Act 2009).
Finance Act 2009 (FA 2009), Schedule 56, Paragraphs 13-15
The FTT does not have a general judicial review jurisdiction. It may consider public law points only where the statute granting the right of appeal permits.
Birkett v HMRC [2017] UKUT 89 (TCC); Beadle v HMRC [2020] STC 1058; KSM Henryk Zeman v HMRC [2021] UKUT 182 (TCC)
Rule 5(3)(k) of the FTT Rules allows transfer of proceedings to another tribunal if that tribunal has jurisdiction and a change of circumstances warrants it, but cannot circumvent judicial review procedures.
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (FTT Rules), Rule 5(3)(k)
Rule 8(2)(a) of the FTT Rules mandates striking out proceedings if the tribunal lacks jurisdiction.
FTT Rules, Rule 8(2)(a)
Section 15 TCEA 2007 grants judicial review powers to the Upper Tribunal, not the First-tier Tribunal.
Tribunals, Courts and Enforcement Act 2007, Section 15
Outcomes
The FTT appeal was struck out.
The FTT lacked jurisdiction because the appealable decisions (penalty notices) had been withdrawn by HMRC before the appeal was lodged. The FTT does not have a general judicial review jurisdiction to address Mr. Stenhouse's claims of HMRC incompetence and the public law arguments raised are not within the scope of the FTT's statutory jurisdiction.
The FTT refused to transfer the proceedings to the Upper Tribunal.
The criteria for transfer under FTT Rule 5(3)(k) were not met. No valid proceedings existed in the FTT, there was no change of circumstances, and the UT is not the appropriate forum for complaints about administrative failings. Furthermore, the High Court would not transfer such a claim, and doing so via the FTT would circumvent the correct procedure.