Lineker & Anor (t/a Gary Lineker Media) v Revenue & Customs (Procedure - Application to amend grounds of appeal - Application allowed) [2021] UKFTT 101 (TC)

FTT-Tax
Lineker & Anor (t/a Gary Lineker Media) v Revenue & Customs (Procedure - Application to amend grounds of appeal - Application allowed)
[2021] UKFTT 101 (TC) · 2020-03-16
[36]“36. An application to amend will be refused if it is clear that the proposed amendment has no real prospect of success. The test to be applied is the same as that for summary judgment under CPR Part 24. Thus the applicant has to have a case which is better than merely arguable. The court may reject an amendment seeking to raise a version of the facts of the case which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation.[37]Beyond that, the relevant principles applying to very late applications to amend are well known. I have been referred to a number of authorities: Swain-Mason v Mills & Reeve [2011] 1 WLR 2735 (at paras. 69 to 72, 85 and 106); Worldwide Corporation Ltd v GPT Ltd [CA Transcript No 1835] 2 December 1988; Hague Plant Limited v Hague [2014] EWCA Civ 1609 (at paras. 27 to 33); Dany Lions Ltd v Bristol Cars Ltd [2014] EWHC 928 (QB) (at paras. 4 to 7 and 29); Durley House Ltd v Firmdale Hotels plc [2014] EWHC 2608 (Ch) (at paras. 31 and 32); Mitchell v News Group Newspapers [2013] EWCA Civ 1537 . Drawing these authorities together, the relevant principles can be stated simply as follows : a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted; b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission; c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept; d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done; e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation; f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay; g) a much stricter view is taken nowadays of non-compliance with the Civil Procedure Rules and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so.” “… the law on pleadings is clear: the appellant must state what are its grounds of appeal. If it does not, it cannot rely on those grounds. And if it wants to rely on a new grounds of appeal, as it does here, it must apply for permission to amend. And Quah and Denley set out the principles the Tribunal will consider in determining such an application.” discussion and conclusion Quantum Ground 19. Paragraph 6 of the statement of case, which sets out the total amount of income tax and NICs assessed by the Determinations and Notices at £3,621,735.90 and £1,307,160.46 respectively, goes on to say that HMRC consider the correct NICs figure to be £1,313,755.38, some £6,5959.80 more than the sum assessed (see paragraph 9, above). There is, therefore, clearly an issue with regard to quantum. 20. Section s 50 TMA which, by virtue of Regulation 80(5) of the Income Tax (Pay As You Earn) Regulations 2003, applies to the Determinations provides: 50 Procedure (6) If, on an appeal notified to the tribunal, the tribunal decides—(a) that the appellant is overcharged to tax by a self-assessment;(b) that any amounts contained in a partnership statement are excessive; or(c) that the appellant is overcharged by an assessment other than a self-assessment, the assessment or amounts shall be reduced accordingly, but otherwise the assessment or statement shall stand good. (7) If, on an appeal notified to the tribunal, the tribunal decides— (a) that the appellant is undercharged to tax by a self-assessment; (b) that any amounts contained in a partnership statement are insufficient; or (c) that the appellant is undercharged by an assessment other than a self-assessment, the assessment or amounts shall be increased accordingly. 21. With regard to the Notices, Regulation 10 of the Social Security (Decisions and Appeals) Regulations 1999 provides: If on an appeal … it appears to the Tribunal that the decision should be varied in a particular manner, the decision shall be varied in that manner, but otherwise shall stand good. 22. In T Haythornwaite & Sons v Kelly (HM Inspector of Taxes) (1927) 11 TC 657 Lord Hanworth MR, referring to a previous incarnation of s 50(6) TMA, said, at 667:
“Now it is to be remembered that under the law as it stands the duty of the Commissioners [and since 1 April 2009 the Tribunal] who hear the appeal is this: Parties are entitled to produce any lawful evidence, and if on appeal it appears to a majority of the Commissioners by examination of the Appellant on oath or affirmation, or by other lawful evidence, that the Appellant is over-charged by any assessment, the Commissioners shall abate or reduce the assessment accordingly; but otherwise every assessment or surcharge shall stand good. Hence it is quite plain that the Commissioners are to hold the assessment as standing goods unless the subject - the Appellant - establishes before the Commissioners, by evidence satisfactory to them, that the assessment ought to be reduced or set aside.” “There is a venerable principle of tax law to the general effect that there is a public interest in taxpayers paying the correct amount of tax, and it is one of the duties of the Commissioners in exercise of their statutory functions to have regard to that public interest.”
I would add to this that in most cases the Tribunal will consider and determine both liability and quantum at the same hearing. It is, indeed, according to s 50 TMA, the purpose of an appeal. 25. The question is whether I should adopt such an approach in this case or accede to HMRC’s request, at paragraph 7 of the statement of case, for the issue of Mr Lineker’s employment status under the hypothetical contract with the BBC and/or BT Sport to be determined in principle with a further hearing only being listed if the parties are unable to reach agreement in relation to quantum (see paragraph 9, above). 26. In the absence of any explanation for the request, other than paragraph 6 of the statement of case, or any reference to the “key principles”, as summarised by the Upper Tribunal at [28] in Wrottesley v HMRC [2016] STC 1123 , to be considered in determining whether a preliminary hearing should be ordered, and having regard to both the applicable Quah principles and the overriding objective, I have come to the conclusion that the Tribunal should determine the quantum and liability issues at the same hearing. 27. However, as is clear from Haythornwaite , it is for GLM to adduce evidence to challenge the Determinations and Notices not for HMRC to justify them. As such, I see no reason why it should be necessary to direct HMRC to provide further particulars in relation to quantum to enable the Tribunal to determine the Quantum Ground at the substantive hearing. However, HMRC may (if so advised) respond to this ground by way of an amendment to the statement of case. Validity Ground 28. GLM contends that the 2013-14 Notice is void as, unlike Regulation 80 of the Income Tax (Pay As You Earn) Regulations 2003 which applies (with emphasis added) “i f it appears to HMRC that there may be tax payable for a tax year … which has not been paid to HMRC ”, s 8 of the Social Security Contributions Act 1999 (“SSCA”) requires an officer of the Board “ to decide whether a person is or was liable to pay contributions of any particular class and, if so, to the amount that he is liable to pay ”. 29. This, GLM submits, requires a high degree of certainty before a decision can be made by an officer of the Board under s 8 SSCA to issue a Notice which was not present in this case as can be seen in the covering letter, dated 16 February 2018, to the 2013-14 Notice in which the officer explains:
“My review of the contractual arrangements between Gary Lineker & Danielle Bux T/A Gary Lineker Media and the BBC and BT Sport to determine whether or not the intermediaries legislation, commonly known as IR35, applies is ongoing. Although I am not yet in a position to issue a formal opinion I am conscious that the contractual arrangements for the engagement with the BBC currently being reviewed will cover the tax year 2013/14. … As I have already mentioned I do not have sufficient facts at present upon which I can issue an opinion on your employment status and these assessments are not an indication of where we are in that process.”
[emphasis added] 30. Given that this ground raises a succinct and discrete legal issue and that these proceedings are at an early stage, I consider that GLM should be permitted to add the Validity Ground to the grounds of appeal. Clearly HMRC should be afforded an opportunity to respond to this new ground and may do so by way of an amendment to the statement of case. directions 31. Therefore, for the reasons above, it is directed that: (1) the appellants be granted permission to amend the grounds of appeal to include those grounds set out at paragraph 11, above. (2) The respondents shall either , within 56 days of the date hereof, provide the appellant and Tribunal with an amended statement of case in response to the amended grounds of appeal or , within 28 days of the date hereof, notify the Tribunal and appellants that it is intended to rely on the statement of case dated 7 October 2019. (3) The parties shall liaise and use their best endeavours to agree case management directions for the progress of this appeal and not later than 28 days following the provision of an amended statement of case or confirmation that it is intended to rely on the statement of case dated 7 October 2019 in compliance with direction (2), above, either provide to the Tribunal their agreed proposed directions or in the absence of agreement each party’s own proposed directions. (4) Any such proposed directions, whether agreed between the parties or not, shall take account of the requirement for electronic PDF bundles to be produced for the hearing in compliance with the General Guidance on PDF Bundles issued by the President of the Tax Chamber First-tier Tribunal on 23 June 2020 and the possibility that, due to social distancing requirements etc, a physical hearing may not be possible. Right to apply for permission to appeal 32. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. JOHN BROOKS TRIBUNAL JUDGE RELEASE DATE: 14 APRIL 2021