J&T Goods Ltd v The Commissioners for HMRC [2026] UKFTT 777 (TC)

[2026] UKFTT 00777 (TC)Case No TC 09892
FIRST-TIER TRIBUNAL
TAX CHAMBER
Date Judgment date: 21 May 2026
Decided on the papers
Appeal reference: TC/2025/04603
PROCEDURE – VAT – input tax – HMRC withdrawal of decision – jurisdiction – appeal struck out – no extant decision – reinstatement refused
Determined on the papers
Before
TRIBUNAL JUDGE GERAINT WILLIAMS
Between
J&T GOODS LTDAppellantTHE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMSRespondentDECISION

Introduction

[1]This decision concerns an application by the Appellant to reinstate its appeal following correspondence from HMRC to the Tribunal and Appellant indicating that they did not intend to defend the appeal. The Appellant contends that the appeal should proceed to a determination even in the absence of participation by HMRC.[2]The application has been determined on the papers. The Tribunal is satisfied that it is able to do so pursuant to Rule 29(1)(b) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, which provides that the Tribunal may make a decision without a hearing.[3]The issue for determination is whether, in light of HMRC’s conduct in February 2026, the Tribunal retains jurisdiction over the appeal and, if not, whether there is any basis upon which the proceedings may be reinstated.

Procedural background

[4]By a decision dated 18 July 2025 HMRC amended the Appellant’s VAT return for the period 10/2024 reducing the input tax claimed from £38,911 to £878.[5]The Appellant sought a review of that decision. By letter dated 25 September 2025, HMRC upheld the decision.[6]The Appellant thereafter exercised its right of appeal to this Tribunal. There is no dispute that, at that stage, a valid appealable decision existed and that the Tribunal had jurisdiction.[7]On 12 February 2026, HMRC wrote to the Tribunal stating that they did not intend to defend the appeal and invited the Tribunal to close its file.[8]The Appellant subsequently made an application, dated 19 February 2026, seeking to continue the appeal to a full hearing notwithstanding HMRC’s position.[9]HMRC’s response dated 31 March 2026 makes clear that their position is that the decision under appeal was withdrawn with the consequence that there is no longer any appealable matter before the Tribunal and that the proceedings must remain struck out.

The appellant’s position

[10]The Appellant submits that HMRC’s statement that they do not intend to defend the appeal should be understood as a decision not to participate in further proceedings rather than a withdrawal of the underlying decision.[11]It contends that the Tribunal therefore retains jurisdiction and should proceed to determine the appeal in HMRC’s absence.[12]The Appellant further submits that the consequence of HMRC’s position is that the VAT claimed ought to be repaid and that the appeal should be allowed.[13]The Appellant relies upon a number of authorities, including GB Housley Ltd v HMRC [2016] EWCA Civ 1299, Zipvit Ltd v HMRC [2018] EWCA Civ 151, Wakefield College v HMRC [2018] EWCA Civ 952, Hotelbeds UK Ltd and decisions of this Tribunal such as Lucky Technology Ltd [2022] UKFTT 366 (TC), to support its contention that HMRC erred in refusing input tax and in failing to exercise discretion.

The respondent’s position

[14]HMRC submit that they have withdrawn the decision under appeal.[15]It is contended that, as a matter of law, once a decision is withdrawn there is no longer any subject matter for the appeal and the Tribunal therefore lacks jurisdiction.[16]HMRC rely in particular upon LS & RS v HMRC [2017] UKUT 257 (AAC) and Align Technology Switzerland GmbH v HMRC [2024] UKFTT 1100 (TC) to the effect that an appeal must be directed to an extant decision and that, once that decision is withdrawn, the Tribunal must strike out the proceedings for want of jurisdiction.

The applicable legal principles

[17]The Tribunal is a creature of statute. Its jurisdiction in VAT appeals derives from section 83 of the Value Added Tax Act 1994 and is confined to determining appeals against specified decisions of HMRC.[18]It is inherent in the statutory scheme that an appeal must be directed to a decision. As the Upper Tribunal explained in LS & RS v HMRC at [20]:
“It is the nature of an appeal that it must be against something … to constitute an appeal there must be something which [the taxpayer] says is wrong and desires to have put right.”
[19]The Upper Tribunal continued at [25]:
“Without a decision, an appeal has no meaning or substance. It has no subject matter.”
[20]That principle was applied in Align Technology Switzerland GmbH, the Tribunal observed at [52]:
“ … Where HMRC withdraw a decision or assessment after an appeal has been made to the FTT, the FTT ceases to have jurisdiction from that point and must strike out the proceedings or the relevant part of the proceedings (see LS and RS at [25] and rule 8(2)(a) FTT Rules).”
[21]It continued at [53]:
“Applying the above approach to this case, the FTT ceased to have jurisdiction … when HMRC gave notice to the FTT of the withdrawal of their case in relation to those assessments on 25 October 2024. As the FTT no longer has jurisdiction, it follows that I must strike out that part of the proceedings.”
[22]It follows that if the decision under appeal ceases to exist, the appeal itself has no remaining subject matter. Where HMRC withdraw a decision after an appeal has been brought, the Tribunal’s jurisdiction ceases from that point and the proceedings must be struck out under Rule 8(2)(a) of the Tribunal Procedure (First tier Tribunal) (Tax Chamber) Rules 2009.[23]The Tribunal does not in such circumstances allow the appeal. Rather, it recognises that it has no jurisdiction to determine it and the appeal is struck out.

Whether the decision was withdrawn

[24]HMRC’s letter of 12 February 2026 stated that they did not intend to defend the appeal and invited the Tribunal to close its file.[25]Standing alone, that formulation might be capable of more than one interpretation. However, HMRC have subsequently made clear, both in their formal response and in correspondence, that their position is that the underlying decision was withdrawn.[26]There is no evidence before the Tribunal that HMRC continued to rely upon or maintain the decision after February 2026. On the contrary, all subsequent material is consistent with withdrawal.[27]In those circumstances, and on the balance of probabilities, I find that the decision dated 18 July 2025 was withdrawn by HMRC.

Consequences of withdrawal

[28]The effect of that withdrawal is that there is no longer any decision against which the appeal lies.[29]The Appellant’s submission that the Tribunal can proceed to determine the appeal notwithstanding HMRC’s position cannot be accepted. That submission proceeds on the assumption that the decision remains in existence but is not defended. That is not the position found as a matter of fact.[30]Nor can the Tribunal accept the Appellant’s contention that withdrawal entails that the VAT claimed is payable. Withdrawal of a decision does not constitute a determination that the taxpayer’s position is correct. It simply removes the existing decision. Any future entitlement will depend upon further consideration by HMRC and, if appropriate, a further appealable decision.[31]The Appellant’s detailed grounds of appeal, including those relating to the evidential requirements for input tax and HMRC’s exercise of discretion are directed to the merits of the underlying dispute. In the absence of an appealable decision, the Tribunal has no jurisdiction to determine those matters.

Case law relied upon by the Appellant

[32]The authorities relied upon by the Appellant concern the substantive requirements for recovery of input tax and the manner in which HMRC must exercise their discretion in relation to evidence.[33]In GB Housley Ltd, the Court of Appeal considered the proper approach to the exercise of discretion under regulation 29. In Zipvit Ltd, the Court of Appeal addressed the requirement for a valid VAT invoice. In Wakefield College and Hotelbeds, the courts considered the scope of economic activity and entitlement to deduction.[34]The decision in Lucky Technology Ltd concerned whether HMRC had erred in stating that only VAT invoices could support a claim and whether they had failed to consider alternative evidence.[35]Those authorities are directed to the merits of an appeal where the Tribunal has jurisdiction to determine whether input tax is deductible.[36]They do not address, and cannot affect, the anterior question of jurisdiction which arises where the decision under appeal has been withdrawn.[37]The Tribunal accepts that, had the appeal remained extant, those authorities may have been relevant to the merits. However, in the absence of an appealable decision, the Tribunal has no power to determine the substantive issues to which those authorities relate.

The effect of earlier Tribunal correspondence

[38]The Tribunal notes that correspondence was issued indicating that the appeal would be allowed if no further representations were made.[39]That correspondence was issued in error. The correct approach in indirect tax cases is that, where HMRC withdraw the decision under appeal, the Tribunal lacks jurisdiction and the proceedings must be struck out, rather than the appeal being allowed.[40]That error cannot confer jurisdiction where none exists, nor can it alter the legal consequences of withdrawal.

The application to reinstate

[41]The Appellant seeks reinstatement of the appeal.[42]However, once the decision under appeal has been withdrawn, there is no appeal capable of reinstatement. The Tribunal cannot revive proceedings in the absence of an extant decision.[43]The application must therefore be refused.

Conclusion

[44]For the reasons given above:(1) The decision under appeal was withdrawn by HMRC.(2) The Tribunal therefore lacks jurisdiction to determine the appeal.(3) The Appellant’s application for reinstatement is REFUSED.

RIGHT TO APPLY FOR PERMISSION TO APPEAL

[45]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. GERAINT WILLIAMS TRIBUNAL JUDGE Release date: 21 May 2026