Fluid Systems Technologies (Scotland) Ltd & Ors, R (on the application of) v The Commissioners for HMRC

10 October 2024

[2024] UKUT 322 (TCC)

Upper Tribunal

Companies sued the tax authority (HMRC) over a rejected repayment claim. They wanted to question an HMRC worker in court. Usually, this isn't allowed, but the judge let them because there was a disagreement over what the HMRC worker actually did, and this is important to the case. The questioning will be short, focusing only on this specific disagreement.

Key Facts

•Claimants applied for cross-examination of an HMRC witness in judicial review proceedings.
•Judicial review concerns HMRC's refusal of repayment under the Disguised Remuneration Repayment Scheme.
•Dispute centers on whether the decision-maker applied the correct test for "reasonable disclosure" under s20(5)(d) Finance Act 2020.
•Claimants argue the decision-maker misapplied the test, using a "clear indication" standard instead of the correct standard.
•HMRC disputes this, relying on the decision-maker's witness statement.
•A conflict exists between the decision letter and the witness statement regarding the test applied.

Legal Principles

Cross-examination in judicial reviews is exceptional and only permitted where necessary for a fair and just disposal.

Administrative Court Judicial Review guide 2024, 11.2.2; R (oao Bancoult v Secretary of State for Foreign and Commonwealth Affairs) [2012] EWHC 2115 (Admin)

The court/tribunal must refuse relief if the outcome would likely not have been substantially different if the conduct complained of had not occurred (s 31(2A) Senior Courts Act 1981; s16(3C) Tribunal Courts and Enforcement Act 2007).

Senior Courts Act 1981, s 31(2A); Tribunal Courts and Enforcement Act 2007, s16(3C)

Outcomes

Application for limited cross-examination granted.

Limited cross-examination is necessary for a fair and just disposal due to a material factual dispute (the test applied) and an apparent conflict between documentary and witness evidence. The tribunal must first determine if the test was misapplied before considering HMRC's alternative argument.

Fluid Systems Technologies (Scotland) Ltd & Ors, R (on the application of) v The Commissioners for HMRC

Key Facts

Legal Principles

Outcomes

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