Alexander Langsam v The Commissioners for HMRC [2025] UKFTT 404 (TC)

[2025] UKFTT 00404 (TC)Case No TC09478
FIRST-TIER TRIBUNAL
TAX CHAMBER
Date Judgment date: 4 April 2025
Determined on the papers without a hearing
Appeal reference: TC/2022/11984
Procedure – Rule 23 Tribunal Procedure (First-tier Tribunal) (Tax Chamber Rules) 2009 ‘Allocation of cases to categories’ – Appeal initially allocated as a Basic case – Application by Appellant for appeal to be re-categorised to Standard case – Application dismissed
Before
TRIBUNAL JUDGE BROOKS
Between
alexander langsamAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentThe application was determined on 1 April 2025 without a hearing on the basis of the written submissions of the Appellants and RespondentsDECISION

Introduction

[1]This is my decision on the application of the Appellant, which is opposed by the Respondents, HM Revenue and Customs (“HMRC”), for the re-allocation of his appeal from a ‘basic’ to a ‘standard’ case.

Law

[2]All subsequent references to Rules are, unless otherwise stated, references to the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.[3]Rule 23 provides (insofar as it is material): Allocation of cases to categories 23.—(1) When the Tribunal receives a notice of appeal, application notice or notice of reference, the Tribunal must give a direction—(a) …; and(b) in any other case, allocating the case to one of the categories set out in paragraph (2). (2) The categories referred to in paragraph (1) are— (a) Default Paper cases, which will usually be disposed of without a hearing; (b) Basic cases, which will usually be disposed of after a hearing, with minimal exchange of documents before the hearing;(c) Standard cases, which will usually be subject to more detailed case management and be disposed of after a hearing; and(d) Complex cases, in respect of which see paragraphs (4) and (5) below. (3) The Tribunal may give a further direction re-allocating a case to a different category at any time, either on the application of a party or on its own initiative. (4) The Tribunal may allocate a case as a Complex case under paragraph (1) or (3) only if the Tribunal considers that the case— (a) will require lengthy or complex evidence or a lengthy hearing; (b) involves a complex or important principle or issue; or (c) involves a large financial sum. (5) If a case is allocated as a Complex case— (a) rule 10(1)(c) (costs in Complex cases) applies to the case; and (b) rule 28 (transfer of Complex cases to the Upper Tribunal) applies to the case.[4]On 12 May 2022, the President of the Tax Chamber of the First-tier Tribunal, with the approval of the Senior President of Tribunals and the Lord Chancellor, issued a Practice direction, ‘Allocation of Cases to Categories in the Tax Chamber’ (the “Practice Direction”). The Practice Direction, which has effect from 1 June 2022, was issued to give guidance to the Tax Chamber and inform users in relation to the categorisation of cases under Rule 23.[5]After referring to Rule 23, and citing the categories of cases in Rule 23(2), the Practice Direction continues, stating:
“The Tribunal may, either on the application of a party or on its own initiative, give a further direction at any time re-allocating a case to a different category. This Practice Direction sets out the practice of the Tribunal with regard to the allocation of cases to categories. The fact that a case falls within the descriptions set out in this Practice Direction for a particular category does not mean that the case must, or will, be allocated to that category. Nothing in this Practice Direction affects the ability of any party to a case to make an application regarding the categorisation of that case.”
[6]The Practice Direction then sets out the type of case to be allocated to each category and how it will be determined. In relation to Basic and Standard cases the Practice Direction provides: “BASIC CASES 2. When the Tribunal receives a notice of appeal, application notice or notice of reference in one of the following types of cases, the Tribunal will allocate the case to the Basic category which will be determined at a hearing, by video if possible, unless the case is of a type listed in paragraph 1 (Default Paper cases) or the Tribunal considers that there is a reason why it is appropriate to allocate the case to a different category.(1) Appeals (a) – (c) … (d) against information notices …(2) Applications … STANDARD CASES 3.

Background

(d) against information notices … STANDARD CASES Background

[7]On 24 June 2021, an information notice (the “Information Notice”) was issued by HMRC under paragraph 1 of schedule 36 to the Finance Act 2008. This required the Appellant to produce information/documents to HMRC (including pre-1999 material in relation to his domicile status) on the basis that it was “reasonably required” for checking his tax position.[8]The Information Notice was upheld on 23 June 2022 following a review.[9]On 21 July 2022, the Appellant notified his appeal against the Information Notice to the Tribunal. In essence his grounds of appeal (which had been settled by leading counsel) were that:(1) he had received a “ruling” from HMRC on 2 September 1999 that he was “being treated as not domiciled within the United Kingdom at present” (the “1999 ruling”) and therefore the pre-1999 information and documents sought were not reasonably required for the purpose of checking his domicile status as it affects his tax position; and(2) he had a reasonable expectation that HMRC would not seek to re-open the 1999 ruling.[10]In addition to the appeal before the Tribunal, the Appellant had, on 13 June 2022, sought permission to commence judicial review (“JR”) proceedings in the Administrative Court as to whether the 1999 ruling was, in fact, a ruling and, if so, whether HMRC were bound by it.[11]On 14 September 2022, the Tribunal wrote to the parties notifying them that the appeal had been allocated to the basic category and would be listed as a video hearing.[12]On 23 September 2022, the Appellant made an application, through his solicitors, for the appeal to be re-allocated as a Standard category case on the grounds that, because of complex legal issues (including matters of public law) and the need for “detailed and nuanced” witness evidence, it would be more appropriate for the case to be allocated to the Standard category. The Appellant also applied for the hearing to be changed from a fully video hearing to a hybrid hearing with counsel and the Tribunal panel attending in-person and only witness evidence to be heard remotely by video.[13]On 21 October 2022, HMRC applied for a stay for 30 days after the outcome of the Appellant’s JR proceedings and, in the alternative, objected to the re-allocation of the appeal from a Basic to a Standard case. HMRC’s application (which was settled by counsel) also contained their submissions on the suitability of this appeal being determined by way of a video hearing.[14]HMRC’s application also explained that, notwithstanding his appeal, the Appellant had complied with the Information Notice and had provided the documents/information in his possession or power and that HMRC were satisfied with the documents/information provided. They confirmed that there was therefore no outstanding request for documents and no extant dispute between the parties. The issues raised by the appeal were, HMRC said, “purely academic”.[15]The Appellant responded on 5 December 2022. He accepted that the application should be stayed for 30 days after the determination of the JR proceedings. However, he did not agree that his appeal was purely academic, contending that the statutory test as to whether an information notice was reasonably required “must be applied at the date the Notice was issued.”[16]Given the parties’ agreement, on 20 December 2022 the Tribunal directed that the appeal be stayed until 30 days after the JR proceedings and that the appropriate category for the case would be considered after the expiry of the stay.[17]Permission to bring the JR proceedings was refused on the papers by Sir Ross Cranston on 10 July 2023. The application was renewed but refused following an oral hearing before Tipples J on 26 July 2024. The Appellant then made an application for permission to appeal to the Court of Appeal.[18]On 20 September 2024, Lewison LJ refused permission to appeal giving the following reasons for doing so:
“1. I agree with the judge that the claim is now academic. The relief sought in the JR claim form all related to HMRC’s request for information for periods predating 1999. That information has been provided. Since the appeal is academic the remaining grounds do not arise. But I comment on them briefly. 2. In so far as it is asserted that HMRC cannot depart from the 1999 “ruling” that assertion depends on establishing that what was said in the letter was a clear unequivocal representation on which the Appellant was entitled to rely. I agree with the judge that the single sentence of that letter relied on does not satisfy the test. The judges conclusion on the meaning of the letter at [18] is correct. 3. Whether a communication by a public authority is sufficient to give rise to a legitimate expectation justiciable in public law is fact-sensitive and dependent on the precise wording of the communication and the circumstances in which it was made. No general point of importance arises on the facts of this case.”
[19]On 11 December 2024, following the expiry of the stay, HMRC on behalf of the parties made an application for the Tribunal to determine the Appellant’s re-allocation application. The application (settled by leading and junior counsel) also contained submissions updating HMRC’s earlier position in relation to the re-allocation issue.[20]It was agreed that the Appellant would respond, by 6 January 2025, to HMRC’s submissions. On 5 February 2025, the Appellant (having been granted an unopposed extension of time to do so) responded. He maintained his position in relation to the re-allocation of his appeal and for the matter to be determined by way of a hybrid, as opposed to a fully video, hearing.[21]Having reviewed the Tribunal’s file, I considered that it might be more efficient to hold a short hearing to determine the re-allocation issue. The Tribunal therefore wrote to the parties (on my instructions) on 28 February 2025 with directions to list such a hearing. Those directions required the parties to liaise and provide the Tribunal with:(1) two sets of alternative dates when they were available for a ½ day video hearing to determine the re-allocation issue; and(2) their agreed proposed directions (or each party’s directions if agreement was not possible) for the onward progression of this matter.[22]Both parties responded on 14 March 2025. There was agreement that a hearing was not needed to determine the re-allocation issue. The parties also provided their agreed proposed directions for the further progress of the appeal as a Basic case and also their proposed alternative directions if it was re-allocated as a Standard case.[23]On 26 March 2025 (again on my instructions) the Tribunal wrote to the parties:
“The responses by the parties to the Directions issued on 28 February 2025 together with their proposed directions have been referred to Judge Brooks. Having considered these, he concurs with the parties that a hearing is not necessary to determine the re-allocation issue. This will therefore be determined on the papers on the basis of the parties’ submissions which have already been provided and the directions for a video hearing set aside accordingly. A decision on the re-allocation issue and appropriate directions, as agreed by the parties, will be issued in the next week or so.”

Discussion and Conclusion

[24]Although the parties dispute whether this appeal is purely academic depending on whether there is or is not a lis between them, it is not the purpose of this decision to determine that issue. This decision is solely to determine whether the appeal should be re-allocated as a Standard case. Having carefully considered the written submissions of the parties and taken into account, as I must, the overriding objective in Rule 2 to deal with cases “fairly and justly”, I have come to the conclusion that it should not be re-allocated but should proceed as a Basic case.[25]This appeal is an appeal against an information notice and its allocation as a Basic case is clearly consistent with Rule 23 and the Practice Direction. Therefore, unless it is appropriate to allocate the case to a different category, there is no reason to do so.[26]Although the Appellant contends that the appeal should be re-allocated as a Standard case because of the complex legal issues arising and the need for “detailed and nuanced” witness evidence, there does not appear to be any material dispute of fact. Rather, the issues between the parties (eg whether the issue before the Tribunal is purely academic and as regards to the jurisdiction of the Tribunal in relation to public law arguments) are clearly issues of law.[27]It would therefore seem that a relatively short hearing would be sufficient. This is something for which, given the Tribunal’s recent experience, a video hearing would be eminently suitable. As such, I consider that there is no reason to depart from the Practice Direction with regard to the category or format of the appeal.[28]I also note that the relevant documents are known to the parties as a result of their preparation for the JR proceedings. Accordingly, a disclosure process and therefore more detailed case management directions are not required.[29]Finally, notwithstanding the Appellant’s insistence to the contrary, there is no practical advantage to be gained by him by the re-allocation of his appeal. The cost-shifting provisions of Rule 10 do not apply to basic or standard cases and the parties are, subject to the Tribunal’s approval, able to agree appropriate directions (as they have) for the matter to proceed to a hearing as a basic case.[30]Therefore, for the reasons above, the Application is dismissed with the effect that the appeal shall proceed, as originally categorised, as a basic case to be determined by way of a video hearing.[31]Directions for the further progress of this appeal as a basic case, which are in essence as agreed by the parties, but with the addition of directions for the provision of skeleton arguments and an authorities bundle, have been issued at the same time as, but separately from, this decision.

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. Release date: 04th APRIL 2025