“… any partner has the right to appeal assessments against him in relation to his liability to tax on his partnership share is, I think, consistent with the views expressed in Morgan & Self ” 66. However, in Gibbs v HMRC[2013] UKFTT 236 (TC) Judge Mosedale subsequently considered, contrary to the view that she had expressed in Phillips , that: “[55] … there is no right of appeal for a partner to appeal a consequential amendment under s 28B(4) or s 30B(2). While this might superficially appear surprising, it would be consistent with the scheme of the TMA. Section 111 taxes each partner in accordance with his share of the partnership profits. Each partner must declare his share of the profits as disclosed on the partnership return. The partners' liability is driven entirely by the partnership return. Amendments to that return automatically are carried on to the partners' returns (s28B(4) and s 30B(2)). If a partner were allowed an individual appeal against his own return, this might lead to a situation of over or under taxation of the partnership profits as a whole as there is a risk that a different partnership profit figure would be used for different partners' tax returns. 56. It seems to me that a proper interpretation of s 31 and one that is consistent with logic is that only the partnership returns can be appealed. But as I said in Phillips , any partner can bring the appeal. The effect of succeeding in the appeal would be a reduction in the partnerships’ taxable profits and this would flow through to benefit all partners under s 50(9).” 67. In MCashback Software 6 LLP v HMRC[2013] UKFTT 679 the Tribunal (Judge Cannan), whose focus was on the issue of appeal rights in the case of a consequential amendment to an individual’s tax return under s 28B(4) TMA (finding that there were none), characterised the second issue in Morgan and Self (at [56]) as: “…whether individual partners could challenge on appeal the contents of a partnership return and in particular the partnership statement. HMRC contended they could not. The remedy of an individual partner was to raise the matter in the partnership.” 68. He continued, at [57]: “The Tribunal Judge expressed the view that section 31 TMA 1970 would not naturally be construed so as to give an individual partner a right of appeal against a partnership return which had not been amended by HMRC. However she said that the individual partner could make an individual return under section 8 effectively adjusting the partnership statement so that the income or gains returned by the individual were seen by that individual to be correct. HMRC could then open an enquiry into the individual return of the partner and the partner could appeal any amendment, even if it were an amendment so as to ensure consistency with the partnership statement .” 69. Following Morgan and Self , HMRC published guidance on the inclusion of partnership profit allocations in partners’ tax returns in their Enquiry Manual at EM7025. This stated: Following the Morgan and Self cases, we take the view that partners should normally resolve between themselves any dispute about the allocation of profits. But, in exceptional cases, where there is a genuine disagreement that cannot be resolved between the partners, individual partners should • enter, as their share of partnership profits, the amount they consider to be correct and advise us that they have done so by making an entry in the white space notes section of the return to show • advise us that they have done so by making an entry in the white space notes section of the return to show • the profits as allocated in the partnership statement, • a deduction (or addition) of the disputed amount, and • an explanation about why they think the profit allocated to them in the partnership statement is wrong. If the individual partner does this, then we would not automatically regard the personal return as incorrect if profits, as declared by the individual, were a "net" amount after deducting the disputed amount. But each case will turn on its facts. If there is a discrepancy between profits as allocated by the partnership and profits as returned by the partner, you may need to open enquiries into the returns in order to establish the correct position in respect of both partnership and partner's returns. Normal culpability considerations will apply. Discussion and Conclusion 70. For the appellants, Mr Bremner contends that the tax adjustment, the add back to the accounts by the Designated Members, was incorrect as a matter of tax law and that as a result the self-assessments in the individual tax returns were correct and therefore complied with the requirements of s 8 TMA. He relies on the obiter observations of the Special Commissioner in Morgan and Self at [69] to [74] (see, paragraph 64, above) and notes that this accords with the guidance contained in HMRC’s Enquiry Manual, EM 7025. 71. Ms Nathan, for HMRC who does not accept that the appellants’ individual returns comply with s 8 TMA, submits that the issue of whether BTG’s returns were GAAP compliant is not justiciable in this appeal as it is by the members of the LLP rather than the LLP itself. She says that their proper course for challenging the correctness or otherwise of the LLP adjustment is by way of an appeal by BTG against the s 28B(1) TMA partnership closure notice, or if the members cannot agree whether to appeal by way of civil proceedings against the LLP. 72. Turning first to s 8 TMA (which is set out at paragraph 51, above), as Dr Brice observed, at [73] of Morgan & Self : “It seems to me to be implicit in these provisions that what must be established is the right amount upon which the individual is chargeable to tax and the right amount of tax payable by him, no less but also no more. If that is right then the whole section must be interpreted in the light of that purpose.” 73. However, save for one exception, s 8 TMA does not provide any guidance on what information may “reasonably be required” by HMRC for this purpose. That exception is contained in s 8(1B) TMA which requires a person who carries on a trade in partnership to include in his or her return “each amount which, in any relevant statement, is stated to be equal to his share of any income, loss, tax, credit or charge for the period in respect of which the statement is made” with the “relevant statement” being the partnership statement made in accordance with s 12AB TMA setting out the partnership profits and the amount allocated to each partner (s 8(1C) TMA). 74. Relying on Colin Moore Ms Nathan submits that not only is a partner obliged to include the figure of the share of the partnership profit allocated on his or her return as stated in the partnership statement but that it has to be recorded in the correct box on that return and that a failure to do so would amount to non-compliance with the strict statutory requirements of s 8(1B) TMA. However, although the Upper Tribunal in Colin Moore did refer to the “correct” figure being included in a taxpayer’s return it did not address the question that arises here which is what is the correct figure? Is it that provided by the appellants in their individual returns or BTG in the partnership return and, as such Colin Moore is of little, if any, assistance in the present case. 75. Ms Nathan, who contends that the “correct” figure is that declared in the partnership statement says that provided an individual enters this figure in the correct box of his or her individual tax return it will be “correct and complete” and the individual would therefore be able to make the declaration required by s 8(2) TMA. She submits that such an interpretation is to be preferred to that in Morgan & Self as it recognises that Parliament could not have intended there to be tension between the two obligations it imposes at s 8(1B) TMA and s 8(2) TMA. This is because s 8(2) TMA applies to everyone required to deliver a tax return and must be consistent to all individuals. Moreover, she says, it would be contrary to the intention of Parliament if s 8(2) TMA were to take precedence over s 8(1B) TMA as it was clearly intended that tax assessments on the partners must flow directly from the partnership return and (as was the situation prior to the introduction of self-assessment) that 100% of reported profits would be assessed (see Vaines, at paragraph 61, above). 76. With regard to the obiter observations in Morgan & Self , which as a decision of this Tribunal is not binding, Ms Nathan submits that because Dr Brice gave precedence to s 8(2) TMA over 8(1B) TMA it was wrongly decided and in any event should not be followed as it was concerned with the nature of particular payments and not the computation of partnership profits or allocation between the partners. 77. Mr Bremner, however, questions the interpretation of s 8(2) TMA advanced by Ms Nathan which he says cannot be correct. He illustrated his submission by way of an example where an individual knew that a partnership statement was incorrect because it contained a negligent or careless understatement of a liability to tax. In such circumstances not only is the person who gave the partnership return to HMRC, the designated partner, liable to a penalty under paragraph 1 of schedule 24 to theFinance Act 2007 calculated by reference to the potential lost revenue but, as a result of the application of paragraph 20 of that schedule, where the inaccuracy affects the amount of tax payable by a partner, the partner is also liable to a penalty. The only way that such a partner could protect himself from a penalty, Mr Bremner says, would be to include a higher figure in his personal return – something that HMRC’s construction of s 8 TMA does not permit. Mr Bremner contends that similar difficulties would also arise if, as in this case, the partnership statement overstates a liability. 78. In response Ms Nathan suggests that a partner who believed the partnership profit to have been understated first course of action should be to seek, through the partnership, to amend the partnership return or arrange for a successor to be appointed as the nominated partner if he or she is not acting in the interests of the partnership. However, as this would take time the partner could either: (1) put the s 8(1B) TMA figure in box 7 (share of partnership’s profits) in his return; (2) put the s 8(1B) TMA figure in the correct box of his return (box 7) and notes in the “white box” his belief that the profits are understated; (3) put the s 8(1B) TMA figure in the correct box of his return (box 7) and notes in the “white box” his belief that the profits are understated. Additionally, the partner includes the additional income he believes to be missing from the partnership account in the “other income” box of his return; (4) put the higher figure he believes to be correct in box 7 of his return and puts the partnership figure and explanation in the “white box” and includes the additional income as “other income” in the box in his return; or (5) put the higher figure he believes to be correct in box 7 of his return and omit the s 8(1B) TMA figure entirely. 79. In the first three of the above options, Ms Nathan says, HMRC would regard the partner’s return as correct in law at the time of filing enabling him to make the s 8(2) TMA declaration. However, he could be liable to a penalty if he opted for (1) or (2) above in respect of an error in the partnership statement that affected the amount of tax payable him. Although he could also be liable to a penalty in (3) because of the incorrect partnership return as any amendment should not lead to additional tax being due there would be no potential lost revenue on which it could be calculated and accordingly no penalty would be due. With regard to options (4) and (5), HMRC would regard the return as incorrect as the s 8(1B) TMA has not been included in box 7 and as such a s 8(2) TMA declaration could not be made. The partner would be protected from potential penalties, however, in option (4) because of the entry in the “other income” box but not option (5) where the additional amount has not been included in the return. 80. However, as Mr Bremner submits, such an approach would lead to a partner, who seeks to avoid a liability to a penalty (as in option (3), above) including part of his share of the partnership profit in the “other income” box of his return. This would appear to be inconsistent with Ms Nathan’s submission that the correct figure must be included in the correct box in a tax return and it is difficult to reconcile, if I were to accept Ms Nathan’s argument, how an individual, in circumstances described in option (3) knowing that his individual return is incorrect, could make the declaration required by s 8(2) TMA. 81. Clearly, as Dr Brice observed at [72] in Morgan and Self , the statutory provisions “do not slot easily into place” and do not appear to deal with the case where a partnership and individual partner disagree. However, albeit obiter and “with some hesitation”, Dr Brice did consider the issue arising in this appeal, ie whether partners are entitled to declare different profit share figures on their individual tax returns to those declared on the partnership tax return where they believe that shown on the partnership return is incorrect. 82. Although a first instance decision of the First-tier Tribunal is not binding in the way that a decision of the Upper Tribunal or Court of Appeal would be it would, nevertheless, be expected to be followed by the First-tier Tribunal in another similar case unless considered clearly wrong. In HMRC v Abdul Noor[2013] UKUT 71 (TCC) the Tax and Chancery Chamber of the Upper Tribunal, in relation to the effect of a decision of one High Court Judge on another (but equally applicable in the case of any persuasive authority or court of tribunal of first instance), said, at [82]: “… although the decisions were not binding on him in the way that a decision of the Court of Appeal would be binding, the decision of a High Court Judge ought to be followed by another [High Court] judge unless that judge thinks that the earlier decision was clearly wrong”