Jeremy Priestley v The Commissioners for HMRC [2025] UKFTT 876 (TC)

[2025] UKFTT 00876 (TC)Case No TC09588
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 26 June 2025Date Judgment date: 18 July 2025
In public by remote video hearing
Appeal references: TC/2024/02777
TC/2024/02778
TC/2024/02779
INCOME TAX – case management – appeal against a final closure notice – HMRC application to strike out – rejected – HMRC application for a direction that the appellant amends his grounds of appeal – granted – appellant’s application for specific disclosure - rejected
Before
TRIBUNAL JUDGE NIGEL POPPLEWELL
Between
JEREMY PRIESTLEYAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentCharlotte Brown of counsel instructed by Brabners LLP for AppellantJohn McKee litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

INTRODUCTION

[1]This case management decision deals with three applications (“the applications”) which arise from appeals brought by the appellant in respect of final closure notices (“the closure notices”) issued by HMRC for the tax years 2007/2008, 2008/2009, and 2009/2010 (“the years in question”).[2]In chronological order, the applications are: (1). HMRC’s application dated 26 July 2024 (entitled an application for further and better particulars) that the appellant files amended and detailed grounds of appeal (“the f and bp application”). (2). The appellant’s application dated 19 August 2024 for an order that HMRC makes specific disclosure of certain documents and information (“the disclosure application”). (3). HMRC’s application dated 25 June 2025 that the appellant’s appeals be struck out (“the strike out application”).[3]For the reasons given later in this decision, I have dismissed the strike out application and the disclosure application and I have granted the f and bp application.[4]I am grateful to Ms Brown and to Mr McKee for their oral and written submissions at and prior to the hearing. I have considered these in detail even though I have not found it necessary to refer to each and every one of them in reaching my conclusions.

THE LAW

[5]There was no dispute about the relevant law which is summarised below.[6]Where HMRC have opened an enquiry into taxpayer’s self-assessment tax return, the enquiry is completed when an HMRC officer “informs the taxpayer by notice (a “final closure notice”) …that the officer has completed his enquiries”. (Section 28A (1B) Taxes Management Act 1970 (“TMA”).[7]A final closure notice must state the officer’s conclusions and “make the amendments of the return required to give effect to his conclusions”. (Section 28A (2) TMA)[8]Under section 31 TMA an appeal may be brought against–(a) any amendment of a self-assessment under section 9C of this Act (amendment by Revenue during enquiry to prevent loss of tax),(b) any conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act (amendment by Revenue on completion of enquiry into return),(c) any amendment of a partnership return under section 30B(1) of this Act (amendment by Revenue where loss of tax discovered), or(d) any assessment to tax which is not a self-assessment.[9]Under Rule 2 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (as amended) (the “Rules”) I am required to give effect to the over-riding objective when exercising any power under the Rules. The over-riding objective, as set out in Rule 2(1), is as follows: “The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly”.[10]Rule 8 deals with strike out.

(a) :

“The Tribunal must strike out the whole or part of the proceedings if the Tribunal …does not have jurisdiction in relation to the preceding or that part of them;…”
.

THE EVIDENCE AND THE FACTS

[11]I was provided with a bundle of documents and authorities. From these I find as follows: (1). The closure notices were issued by HMRC on 17 March 2022. They follow broadly similar formats. They each explain what HMRC has looked at and how each notice amends the appellant’s self-assessment tax return. They each include a comparison of the tax declared before and after the amendment and enclosed a copy of the tax calculation reflecting that comparison (“thetax calculation”). In the closure notices for 2007/2008 and 2008/2009, HMRC also enclosed a copy of the appellant’s self-assessment statement dated 17 March 2022, and in that, and in the notice itself, identified that the total amount which the appellant needed to pay was £875,331.77. (2). The closure notice for the tax year 2009/2010 enclosed a copy of the appellant’s self-assessment statement dated 15 March 2022, but does not, on the face of it, identify the amount which the appellant needed to pay. (3). The closure notice for the tax year 2007/2008 states that HMRC’s conclusion is that losses arising from the appellant’s transaction in the Liberty Syndicate Scheme were not allowable. It explained that the amendment to the tax return for that year showed tax due of £1,003,284.83, compared with the tax declared in the return of £631,209.49, a difference of £372,075.34. This difference is “the result of the amendment to your tax return made by this final closure notice. A copy of our tax calculations is enclosed with this letter”. (4). The tax calculation for this year is headed “Tax Calculations”. On the left-hand side of the page is the tax calculation for 2007/2008 (based on return figures). On the right-hand side of the page is the tax calculation for that year based on revised figures. The tax figure on the left-hand side is £631,209.83. The tax figure on the right-hand side is £1,003,284.83. (5). The closure notice for the tax year 2008/2009 states that HMRC’s conclusion is that losses arising from the appellant’s transaction in the Liberty Syndicate Scheme were not allowable. It explained that the amendment to the tax return for that year showed tax due of £1,043,307.72, compared with the tax declared in the return of £1,042,854.12, a difference of £453.60. This difference is “the result of the amendment to your tax return made by this final closure notice. A copy of our tax calculations is enclosed with this letter”. (6). The tax calculation for this year is headed “Tax Calculations”. On the left-hand side of the page is the tax calculation for 2008/2009 (based on return figures). On the right-hand side of the page is the tax calculation for that year based on revised figures. The tax figure on the left-hand side is £1,043,307.72, The tax figure on the right-hand side is £1,042,854.12. (7). The closure notice for the tax year 2009/2010 states that HMRC’s conclusion is that Gift Aid Relief claimed by the appellant arising in respect of the Project 2010 tax avoidance scheme was not allowable. It explained that the amendment to the tax return for that year showed tax due of £985,003.61 compared with the tax declared in the return of £785,003.61 a difference of £200,000. This difference is “the result of the amendment to your tax return made by this final closure notice. A copy of our tax calculations is enclosed with this letter”. (8). The tax calculation for this year is headed “Tax Calculations”. On the left-hand side of the page is the tax calculation for 2009/2010 (based on return figures). On the right-hand side of the page is the tax calculation for that year based on revised figures. The tax figure on the left-hand side is £785,003.61, The tax figure on the right-hand side is £985,003.61. (9). This closure notice enclosed a copy of the appellant’s self-assessment statement dated 15 March 2022 but noted that it “does not yet show the £33,333.40 paid in respect of [an accelerated payment notice]”. It does however go on to state that the amount that the appellant needed to pay was as set out in the self-assessment statement less the amount paid in respect of the accelerated payment notice. (10). The appellant’s self-assessment statement dated 17 March 2022 is a four page document comprising four columns: Date, Transactions, Amount and Summary. The Dates range from 2010 to 2022, and the Transactions evidence amendments made to the appellant’s tax returns as reflected by the relevant closure notices, payments on account, interest due, allocation of specific payments made by the appellant and subsequent amendments made by adjustments following later enquiries. The Summary column is a running total reflecting the payments and liabilities. I was not provided with a copy of the self-assessment statement dated 15 March 2022, but I understand that it is in the same format. I shall refer to these self-assessment statements as “the self-assessmentstatements”. (11). The appellant’s grounds of appeal against each of these closure notices is in identical terms. The crux is at paragraph 111 of those grounds of appeal. “The Appellant’s sole ground of appeal is that he challenges the quantum of his purported liability following the issuance of the Decisions. The Respondents claim that he owes them [£X] whereas he is of the view that he is entitled to a repayment of c.£200,000. The Appellant had provided the Respondents with a breakdown in support of his position but had not received the same from the Respondents”. (12). I was provided with a copy of this breakdown which comprises a spreadsheet reflecting the appellant’s income for the tax years 2004/2005 until 2023/2024. It also sets out losses, loan interest, personal allowances, pension contributions, gift aid payments and SEIS relief which the appellant claims he is entitled to offset against the liabilities which HMRC are asking him to pay pursuant to the closure notices (“the spreadsheet”). (13). It is clear from the correspondence that the parties have been negotiating in good faith in an effort to clarify the numerical position. HMRC had promised to provide information to the appellant to justify the figures on the self-assessment statement, but negotiations broke down in January 2024. THE APPLICATIONS The f and bp application

THE APPLICATIONS

[12]This is couched in the following terms:
“The Respondents applied to the Tribunal… For the following directions: (1) Within 30 days of this Application Notice… The Appellant is directed file with the Tribunal and serve on the Respondents: (a) Amended grounds of appeal. The amended grounds should detail the legal and factual grounds relied upon in support of his appeal. The Appellant should indicate why they believe the facts or legal reasoning relied upon by the Respondents are incorrect, and the claims for loss relief and Gift Aid should be allowed…”. (a) Amended grounds of appeal. The amended grounds should detail the legal and factual grounds relied upon in support of his appeal. The Appellant should indicate why they believe the facts or legal reasoning relied upon by the Respondents are incorrect, and the claims for loss relief and Gift Aid should be allowed…”
.

The Disclosure application

[13]This is couched in the following terms:
“By no later than 28 days from the date of this Order, the Respondents shall provide to the Appellant all documents and information in its possession, power or control which relate to its calculation of the Appellant’s purported tax liability, as shown on the Appellant’s self-assessment account, including but not limited to, a full reconciliation of the purported tax liability and accompanying explanation, as well as an explanation of and details of the separate account in which the Appellant’s monthly £8,000 payments under the Time to Pay Arrangements are held”
.

The strike out application

[14]The strike out application is made under Rule 8(2)(a) of the Rules on the basis that the tribunal does not have jurisdiction in relation to the proceedings. The grounds for this application are that the appellant’s skeleton argument (which was submitted in relation to the f and bp application and the disclosure application) show that the only basis for the appeal against the closure notices concerns the calculation of the appellant’s liability under the self-assessment statements, something which is not justiciable before the tribunal. DISCUSSION Submissions

DISCUSSION

[15]In summary Mr McKee submitted as follows: (1). Although, at face value, it appears that the appellant is appealing against the closure notices, it is equally apparent from the grounds of appeal and the appellant’s skeleton argument that he is, in fact, challenging the balance of his self-assessment account. This is not an appealable decision within section 31 TMA. (2). The only elements of the closure notices which can be appealed are those under the headings “Our conclusion”, “Reason for our conclusion” and “How your tax return has been amended”. (3). Neither the grounds of appeal nor anything subsequently set out in the appellant’s skeleton argument provide sufficient information of the basis of challenge to enable HMRC to draft its statement of case. The importance of this is set out in Rapid BrickworkLtd (in liquidation) v HMRC [2015] UKFTT 190 at [60] (“Rapid Brickwork”). (4). It is not enough for the appellant to simply say that the amendments which HMRC have made in the closure notices, are incorrect. The appellant’s pleaded case, at present, is essentially that, and does not set out the appellant’s legal and factual case in sufficient detail for HMRC to understand it. (5). The disclosure application lacks specificity and fails to take into account the previous requests made by the appellant and HMRC’s responses thereto.[16]In summary Ms Brown submitted as follows: (1). The appellant’s challenge is not to the mechanics of how the balance on his self-assessment statement has been reached. He does not challenge the disallowance of the losses nor of gift aid relief. He challenges the amendment figure on the basis that it does not take into account various reliefs and set offs to which the appellant is entitled, and payments which the appellant has made on account. In reaching their conclusion, HMRC should have taken these into account, and these reduce the tax payable and indeed suggest that the appellant is owed some £200,000 by HMRC. (2). The closure notices themselves demonstrate that HMRC have taken into account credits and payments by the appellant when coming to their conclusion regarding the amount which is payable by the appellant. (3). As an alternative, the closure notices comprise assessments to tax which are not self-assessments and thus are appealable under section 31(1)(d) TMA. (4). It is not possible for the appellant to fully plead his case unless and until he understands the basis on which the amendments have been made. It is for this reason that the appellant has made his Disclosure application. Once the appellant has that information, he will be able to amend his grounds of appeal to provide the detailed legal and factual basis which will enable HMRC to draft their statement of case. (5). The appellant has drafted the spreadsheet but cannot come to any firm conclusions in it as he does not understand the basis on which the amendments to his returns have been made.

My view

[17]This tribunal is, as is often said, a creature of statute. Its jurisdiction is therefore circumscribed by statute and if the tribunal does not have jurisdiction, then neither party can confer such jurisdiction on it. And I must strike out an appeal where the tribunal has no jurisdiction.[18]The relevant statutory provision in these applications is section 31 TMA which provides a right of appeal against “any conclusion stated or amendment made by a closure notice…”.[19]HMRC enquired into the appellant’s tax returns for the years in question. They closed their enquiries by issuing the closure notices. These “make the amendments of the return required to give effect to [the officer’s] conclusions”.[20]To my mind it is clear that the extent of the amendments are limited to the contents of the closure notices themselves, and the contents of the tax calculations which were attached to those closure notices, and which were referred to therein. The amendments do not extend to the contents of the self-assessment statements which are simply a rolling tally of the amounts of tax which a taxpayer owes (or is owed).[21]If, therefore, the appellant’s appeal is against the former documents, then the tribunal has jurisdiction. If the appeal is against the latter, then it does not.[22]I am sympathetic to HMRC’s position. It is not entirely clear from the appellant’s pleaded case whether, under the guise of appealing against the amendments, he is in fact appealing against the amount of tax which he is being asked to pay through the self-assessment statements. Certainly, the correspondence seems to focus on the amount which these statements are asking him to pay.[23]However, I am persuaded by Ms Brown that the challenge is not limited to the contents of those statements, but to the conclusions reached in the closure notices, and the amendments which reflect those conclusions in the closure notices themselves and the tax calculations. It is certainly open for the appellant to challenge those on the basis that they are numerically wrong on the grounds that the appellant has credits and reliefs which are available to be set off against them. Indeed, I take judicial notice of the fact that in previous cases with which I have been involved, this is precisely what HMRC have done when amending a taxpayer’s return.[24]I am also conscious that strike out is a draconian remedy, and so I am prepared to interpret any ambiguity in the appellant’s position, in his favour.[25]I therefore accept that the appellant’s appeal is against the amendments made by the closure notices and the tax calculations and thus the tribunal does have jurisdiction. I therefore dismiss the strike out application.[26]However, the tax calculations set out, in clear terms, the basis for the amendments. Whilst the appellant might consider that they are incorrect as he has the aforesaid reliefs and credits which can be offset, then that is for him to justify. He seems to have been able to compile a spreadsheet which suggests that his net position, arising from these returns, is that he is owed £200,000 by HMRC. It is his submission that he cannot be certain of this figure because he does not understand the basis on which HMRC have reached their conclusion regarding the amount that he owes.[27]But as I have said, he has no appeal rights against the self-assessment statements, only against the amendments made by the closure notices and the tax calculations. The tax calculations set out, very clearly, what HMRC have done to reach the numerical amendments to the appellant’s returns for the tax years in question. It is now for the appellant to set out the legal and factual basis of his challenge to those calculations. His current pleadings go nowhere close to fulfilling his obligation to do this in sufficient detail to enable HMRC to understand his case.[28]I do not imagine that this will cause the appellant much difficulty as the spreadsheet presumably reflects the principles of this challenge even if he cannot be absolutely certain of the numbers.[29]Once the appellant has provided this information, HMRC can draft their statement of case setting out their grounds (if any) for their challenge. The battle lines are then drawn. At the trial, the appellant can present the evidence justifying his position, and HMRC will need to be in a position to justify their objections.[30]So, I allow the f and bp application.[31]I reject the disclosure application. The onus is on the appellant to provide details of its challenge to the closure notices and tax calculations. It is not for HMRC to justify its computations, although, as I have mentioned above, there may come a time when it will need to do so.[32]It also seems to me that the disclosure application comes dangerously close to requesting information and documents which are relevant to the self-assessment statements rather than to the amendments made by the closure notices and the tax calculations. And of course I have no jurisdiction over the former.

DECISION

[33]For the foregoing reasons: I dismiss the strike out application. I allow the f and bp application on the terms of the direction sought by HMRC save that the appellant shall have 60 days to comply. I further direct that HMRC’s requirement to provide a statement of case is stayed until 60 days after the appellant complies with that direction. I dismiss the disclosure application.

RIGHT TO APPLY FOR PERMISSION TO APPEAL

[34]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: 18th JULY 2025

Cited in 1 later judgment