John Stenhouse v The Commissioners for HMRC
[2023] UKFTT 635 (TC)
Phillip Brian Higgs & Ors v The Commissioners for HMRC
13 December 2023
[2023] UKUT 296 (TCC)
Upper Tribunal
A tax avoidance scheme case went to court. A lower court said it couldn't decide on a key tax credit issue. A higher court agreed with the lower court's decision because a previous case already answered the question. The case was over.
Key Facts
- •The First-tier Tribunal (FtT) lacked jurisdiction to consider whether taxpayers were entitled to PAYE credits under Regulations 185 and 188 of the Income Tax (PAYE) Regulations 2003 for sums end users should have deducted.
- •The case involved a marketed tax avoidance scheme aiming to minimize income tax liability by splitting remuneration.
- •The Appellants appealed the FtT's decision to the Upper Tribunal, raising five grounds of appeal.
- •The Court of Appeal in *Hoey v HMRC* previously addressed the same jurisdictional issue, finding against the taxpayer.
- •The Appellants conceded that the Court of Appeal's decision in *Hoey* was binding, but argued it was wrongly decided.
Legal Principles
The FtT's jurisdiction is entirely statutory and it has no inherent jurisdiction to consider public law arguments.
Court of Appeal in *Hoey v HMRC*, [2022] EWCA Civ 656
PAYE Regulations concern tax collection, not liability. Tax liability is determined by the Income Tax (Earnings and Pensions) Act 2003.
Court of Appeal in *Hoey v HMRC*, [2022] EWCA Civ 656
There's no express right of appeal to the FtT regarding the exercise of section 684(7A) power or PAYE credit availability after its exercise. Appeals against assessments are governed by the Taxes Management Act 1970, section 31.
Court of Appeal in *Hoey v HMRC*, [2022] EWCA Civ 656
The doctrine of precedent binds the Upper Tribunal to the Court of Appeal's decision in *Hoey*, as the Appellants did not seek to distinguish it.
This case, [2023] UKUT 00296 (TCC)
Outcomes
The appeal was dismissed.
The Court of Appeal in *Hoey v HMRC* definitively addressed the jurisdictional issue, and the Upper Tribunal is bound by this precedent. The Appellants did not seek to distinguish the *Hoey* decision.