Gigabiz Ltd & Ors v The Commissioners for HMRC
[2023] UKFTT 693 (TC)
The Best Connection Group Limited v The Commissioners for HMRC
25 October 2024
[2024] UKFTT 846 (TC)
First-tier Tribunal
A company appealed a tax decision about its salary sacrifice plan. The tax office tried to change its arguments late in the game, but the judge said no because it was too late and unfair. The judge also decided how to handle the costs of the case and allowed the tax office to add another witness and have observers in the next hearing.
Key Facts
- •Appeal concerning the tax treatment of salary sacrifice payment arrangements (BSS) operated by The Best Connection Group Limited from April 2012 to March 2016.
- •Dispensation allowed exclusion of certain employee expenditure reimbursements from PAYE from 28 September 2010.
- •HMRC argued the BSS was not a valid salary sacrifice scheme, leading to appeals against various tax determinations and notices.
- •Case involved multiple applications for amendments, cost allocation decisions due to consolidated appeals, and a late witness statement application.
Legal Principles
HMRC must provide a Statement of Case explaining its position sufficiently for the appellant to prepare their case; Civil Procedure Rules (CPR) offer guidance on procedural fairness.
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, rule 25(2)(b); Allpay Limited v HMRC [2018] UKFTT 273 (TC); Three Rivers District Council v Bank of England [2003] 2 AC 1; CPR
Late amendments are assessed at the hearing date; a heavy burden rests on the applicant to justify very late amendments that could prejudice the other party; good reason for delay is needed.
Invest Bank P.S.C. v Ahmad Mohammad El-Husseini [2024] 1235 (Comm); Shinelock v HMRC [2023] STC 976; CIP Properties; Nesbit Law Group v Acasta European Insurance [2018] EWCA Civ 268; Quah Su-Ling v Goldman Sachs International [2015] EWHC 759
Consolidated appeals may maintain different costs regimes; late applications to opt out of the costs regime are assessed based on delay, reason for delay, and prejudice.
Manhattan Systems Limited v HMRC [2017] UKFTT 0862 (TC); Martland v HMRC [2018] UKUT 178 (TCC); Aquarius Film Company Ltd v HMRC [2016] UKFTT 0702 (TC)
Outcomes
Respondent's application to amend the Consolidated Statement of Case refused.
Very late application (over 8 months delay), no reason given for delay, significant prejudice to Appellant, and only 10 days before the substantive hearing.
First appeal remains in the costs regime; cost allocation for the consolidated appeals determined based on specific time periods and considerations of BSS and BTR settlements.
Appellant's late opt-out application from the costs regime was ineffective; Tribunal adopted Respondents' approach to allocate costs considering the consolidation and different phases of the case.
Respondent's application to submit a second witness statement granted.
Witness statement provides advance notice of arguments to be raised at the substantive hearing.
Respondent's applications for a transcript of the substantive hearing and for remote observation by colleagues granted.
Respondents bear costs of the transcript; remote observation was deemed appropriate.