UK luxury Heights Limited v The Commissioners for HMRC [2026] UKFTT 796 (TC)

[2026] UKFTT 00796 (TC)

Case No TC 09896

FIRST-TIER TRIBUNAL

TAX CHAMBER

Hearing Heard on: 29 April 2026

Date Judgment date: 28 May 2026

[Location/By remote video hearing]

Appeal reference: TC/2023/00585

TC/2023/10225

Application for disclosure – jurisdiction –CIS – Reg 9(4) condition B – Sch 55 penalties –relevance – application refused – grounds struck out

Before

TRIBUNAL JUDGE GERAINT WILLIAMS

Between

UK LUXURY HEIGHTS LIMITEDAppellant

THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondent

Ricky Noimark of Melinek Fine LLP Chartered Accountants for Appellant

Christopher Vallis of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for Respondents

DECISION

Introduction

[1]This is the decision of the Tribunal on an application made by the Appellant, dated 2 April 2025 for disclosure of documents and amended case management directions.

[2]The Appellant seeks disclosure of a broad category of internal HMRC material. The stated purpose of that request is to enable the Appellant to understand and challenge:(1) HMRC’s refusal to grant relief under Regulation 9(4) (condition B) (“Reg 9(4) condition B”) of the Income Tax (Construction Industry Scheme) Regulations 2005 (“the CIS Regulations”);

(2) the basis for the calculation of penalties under Schedule 55 Finance Act 2009 (“Schedule 55”);

(3) whether HMRC properly considered statutory mitigating provisions, including special reduction and reasonable excuse; and

(4) the interaction between Regulation 9 relief and the penalty regime.

[3]HMRC opposes the Appellant’s application in its entirety. It submits that the request is founded upon a misunderstanding of both the statutory scheme and the Tribunal’s jurisdiction. It further contends that disclosure is being sought in respect of matters which this Tribunal cannot determine.

[4]For the reasons set out below, I refuse the Appellant’s application. I also determine that the Appellant’s ground of appeal in respect of the determination, insofar as it relies on Reg 9(4) condition B, does not fall within the Tribunal’s jurisdiction and is struck out pursuant to Rule 8(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.

Background

[5]The appeal arises from a determination issued under Reg 13 of the CIS Regulations for the year ended 5 April 2022 and associated penalties imposed under Schedule 55.

[6]It is common ground that the Appellant, as a contractor for the purposes of the Finance Act 2004 failed to make deductions and file returns under the CIS regime. The Appellant’s case is that, notwithstanding that failure, no liability should arise because the subcontractor accounted for and paid the relevant tax, such that Reg 9(4) (condition B) is satisfied.

[7]HMRC has refused to grant relief under that provision for the year in question.

The Appellant’s submissions

[8]The Appellant submits that the present application arises out of what it characterises as a fundamental failure on the part of HMRC to explain the basis upon which it has acted. It contends that, despite repeated requests, HMRC has not provided any coherent account of why it has concluded that Reg 9(4) condition B is not satisfied. This lack of explanation places it at a significant procedural disadvantage and renders it unable to understand, still less properly meet, the case which HMRC seeks to advance.

[9]The Appellant emphasises that that Reg 9(4) condition B was accepted by HMRC in other accounting periods both before and after the year in question. It submits that the only apparent distinction is that, in the relevant period, the subcontractor filed its corporation tax return late, albeit that the return was ultimately filed and the tax paid. It says that HMRC has declined to confirm whether this is the reason for its refusal, but submits that, if that is indeed the basis, it raises a serious legal issue. In particular, such an approach would be inconsistent with the reasoning of the Court of Appeal in Beech Developments Ltd v HMRC

[2024] EWCA Civ 486

(“Beech”) where the Court emphasised that liability under the CIS regime must be determined by reference to the statutory conditions and not by arbitrary or discretionary considerations unrelated to the purpose of the legislation.

[10]The Appellant has sought to engage constructively with HMRC by setting out its understanding of HMRC’s position and inviting clarification. HMRC has declined to confirm or deny that understanding and has instead maintained its refusal without explanation. The only way in which the Appellant can properly understand the basis of HMRC’s decision is by way of disclosure of the underlying material including file notes, internal communications and any analysis undertaken by HMRC in reaching its conclusion.

[11]Turning to the determination, the Appellant has raised a specific ground of appeal that the amount assessed is excessive. HMRC has treated the entirety of the relevant accounting period as falling outside Reg 9(4) condition B whereas, on its case, the factual position does not support such an approach. Even if HMRC were correct in its conclusion as to part of the period the determination is excessive because it does not reflect a more nuanced application of the statutory provisions. Disclosure is required to understand how HMRC has approached that exercise and how it has applied Reg 9(4) condition B in arriving at the figures assessed.

[12]The Appellant’s challenge to the penalties is put more broadly. It submits that the imposition of a substantial penalty in circumstances where HMRC accepts that there has been no loss of tax is inherently questionable. The statutory scheme, properly construed, should not permit the imposition of a significant financial penalty where the underlying tax has in fact been accounted for. HMRC’s approach, in computing the penalty by reference to a pre‑relief figure, lacks a proper legal foundation. HMRC has failed to explain how that result is said to arise from the language of Schedule 55 and that this failure further justifies the need for disclosure.

[13]HMRC has failed to demonstrate that it has properly addressed the statutory mitigating provisions. It refers in particular to paragraph 16 of Schedule 55, which permits a special reduction, and paragraph 23, which provides a defence of reasonable excuse. There is no evidence that HMRC considered whether either provision applied, notwithstanding what it characterises as unusual features of the case, including the absence of any tax loss and the fact that the subcontractor complied with its own tax obligations. In those circumstances, the Tribunal should be slow to assume that HMRC has properly exercised its statutory functions without disclosure of the relevant material.

[14]In support of that submission, the Appellant relies on White v HMRC

[2012] UKFTT 364 (TC)

(“White”) and Hardy v HMRC

[2011] UKFTT 592 (TC)

(“Hardy”), where the Tribunal held that a failure by HMRC to consider or to explain the application of special reduction may render a penalty decision flawed. The Appellant submits that the reasoning in those cases applies equally here. It argues that, without disclosure, the Tribunal is unable to determine whether HMRC considered the relevant statutory provisions at all, or whether it simply imposed the penalty mechanically without addressing the safeguards built into the legislation.

[15]The Appellant further relies on the general principles governing disclosure in this Tribunal. It refers to the decision in Tower Bridge GP Ltd v HMRC

[2016] UKFTT 54 (TC)

(“Tower Bridge”), where the Tribunal held that the concept of relevance should not be narrowly construed and that documents which may advance a party’s case or lead to a “train of enquiry” should be regarded as relevant. It submits that the material it seeks is directly relevant to the issues in dispute, or at the very least may lead to enquiries which assist in understanding HMRC’s position.

[16]Similarly, it relies on HMRC v Ingenious Games LLP & Ors

[2014] UKUT 62 (TCC)

(“Ingenious”), where the Upper Tribunal emphasised that disclosure may be required in order to ensure that each party has a fair opportunity to test the other’s case. Fairness requires that the Appellant be permitted to see the material upon which HMRC’s conclusions are based, particularly where those conclusions have not been explained.

[17]The Appellant also emphasises that its request is proportionate. The categories of documents sought are limited and identifiable, consisting primarily of internal communications and file records relating to specific decisions. HMRC is well placed to conduct a reasonable search for such material and that the burden of doing so is modest when set against the importance of the issues at stake.

[18]The Tribunal should take into account the broader interests of justice. The appeal involves substantial sums and raises issues of principle concerning the proper operation of the CIS regime and the penalty provisions. The Tribunal should ensure that all relevant material is available so that the issues can be determined on a properly informed basis. Refusing disclosure would permit HMRC to rely on unexplained assertions while withholding the material necessary to test them which would be inconsistent with the overriding objective of dealing with cases fairly and justly.

[19]On that basis, the Appellant invites the Tribunal to order disclosure of the documents identified in its application and to direct HMRC to provide a more detailed explanation of the basis of its case.

HMRC’s submissions

[20]HMRC’s submissions are summarised as follows. The Appellant’s application for disclosure is fundamentally misconceived and should be refused in its entirety. The application proceeds on an erroneous understanding both of the Tribunal’s jurisdiction and of the statutory framework governing the determination and the penalties.

[21]HMRC’s primary submission is that the Appellant’s case, insofar as it seeks to challenge the refusal of relief under Reg 9(4) condition B, does not fall within the Tribunal’s jurisdiction. The determination under appeal was issued pursuant to Reg 13 of the CIS Regulations which permits HMRC to determine, to the best of its judgment, the amount a contractor is liable to pay where it believes tax has not been properly accounted for. That determination is appealable. However, the refusal to give a direction under Reg 9(5) in respect of condition B is not subject to appeal.

[22]HMRC relies on the statutory structure of Reg 9. Parliament has expressly provided a mechanism for appeal in relation to condition A but has not done so in relation to condition B. This omission is deliberate and reflects a clear legislative distinction between the two conditions. That distinction was confirmed by the Court of Appeal in Beech where it was held that any challenge to a refusal to grant condition B relief lies exclusively in judicial review and not before the Tribunal.

[23]The effect of Beech is not merely that the Tribunal cannot grant relief under condition B, but that it cannot adjudicate on the correctness of HMRC’s refusal at all. While Reg 9 may be referred to procedurally in order to prevent a determination becoming final, it is not open to the Tribunal to determine whether condition B is satisfied. It follows that any attempt by the Appellant to raise that issue substantively in this appeal is impermissible.

[24]This jurisdictional limitation has a direct consequence for disclosure; disclosure may only be ordered in relation to matters which are relevant to issues that the Tribunal is empowered to determine. Where an issue lies outside jurisdiction any material relating to it is irrelevant as a matter of principle. The Appellant is not entitled to seek disclosure of documents relating to the refusal of condition B because that is not an issue which the Tribunal can determine.

[25]In any event, there is no procedural unfairness in HMRC’s approach. HMRC has made a decision under Reg 9(4) condition B and has communicated that decision to the Appellant. HMRC is not required to provide a detailed explanation of its reasoning in order for the Tribunal to determine the appeal before it. Any complaint by the Appellant as to lack of reasons is, in substance, a challenge to the lawfulness of its decision and therefore falls within the domain of judicial review not this Tribunal.

[26]The Appellant’s grounds of appeal disclose no arguable basis on which the determination can be challenged within the Tribunal’s jurisdiction. The Appellant’s stated ground is that the subcontractor paid tax and that there was therefore no loss to HMRC. This is no more than a restatement of reliance on condition B and does not constitute an independent ground of appeal against the determination. In the absence of a valid ground of appeal within the Tribunal’s jurisdiction there is no basis for the Tribunal to require disclosure.

[27]In relation to the penalties, the Appellant’s case is based on a fundamental misunderstanding of the statutory scheme under Schedule 55. Paragraphs 10 and 11 provide for penalties calculated by reference to the amount which “would have been shown in the return” had the return been filed correctly. This is a hypothetical construct, designed to operate independently of whether the underlying tax is ultimately recovered or whether relief may later be available.

[28]The Appellant has conflated the question of underlying liability with the calculation of the penalty. Even if Reg 9 were ultimately engaged, that would not affect the computation of the penalty, which is determined by reference to the position at the time of default. This is a matter of statutory construction and does not give rise to any factual dispute requiring disclosure.

[29]With regard to the Appellant’s submissions regarding reasonable excuse and special reduction, the Appellant has not pleaded any case in respect of either matter. The Tribunal’s jurisdiction is engaged by the grounds of appeal as pleaded and that the Tribunal should not order disclosure in relation to issues which are not in dispute.

[30]The burden of establishing reasonable excuse rests on the Appellant. Any such argument would necessarily turn on the Appellant’s own conduct and circumstances and that HMRC’s internal documentation cannot be relevant to that enquiry. In the context of special reduction, the Tribunal is concerned with whether such a reduction should be made not whether HMRC properly considered it. It follows that disclosure of HMRC’s internal reasoning is unnecessary.

[31]HMRC also relies on the decision in Seven Capital (Summer Hill) Ltd v HMRC (TC/2023/09523) (“Seven Capital”). Although that decision is unpublished it is closely analogous factually and should be regarded as persuasive. In Seven Capital, the Tribunal rejected an almost identical application for disclosure in the context of CIS penalties on the basis that the issues could be determined by reference to the statutory provisions without the need to examine HMRC’s internal reasoning. The same conclusion should be reached here.

[32]The application is, in reality, a fishing exercise directed at uncovering HMRC’s internal thought processes rather than identifying relevant evidential material. The categories of documents sought are overly broad and disproportionate and that ordering such disclosure would impose an unnecessary burden on HMRC without advancing the resolution of the issues before the Tribunal.

[33]On that basis, HMRC invites the Tribunal:(1) to refuse the Appellant’s application for disclosure in its entirety; and

(2) to determine that the Appellant’s grounds of appeal, insofar as they rely on Reg 9(4) condition B, fall outside the Tribunal’s jurisdiction and should be struck out or disregarded.

The law

[34]The Tribunal’s power to order disclosure derives from Rule 5 of the Tribunal Procedure (First‑tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”) and must be exercised in accordance with the overriding objective in Rule 2.

[35]In Tower Bridge the Tribunal stated at [23] that relevance is to be interpreted broadly, including material which may advance or hinder a party’s case or lead to a train of enquiry, but that disclosure must remain proportionate.

[36]In Ingenious, Sales J held at [67] that fairness requires each party to have a proper opportunity to test the other’s case but at [68] emphasised that disclosure must be directed at issues relevant to the determination of the appeal and not beyond it.

[37]The limits of jurisdiction are defined by statute. In Beech, the Court of Appeal made clear that there is no right of appeal in respect of Reg 9(4) condition B and that disputes concerning that condition cannot be resolved by the Tribunal.

Discussion

[38]The Appellant’s application requires the Tribunal first to identify the issues which properly arise on this appeal, and then to determine whether the disclosure sought is directed to those issues. In undertaking that task, two governing considerations arise. The first is jurisdiction: the Tribunal’s powers, including its power to direct disclosure, are confined to matters which it is authorised to determine. The second is the function of disclosure itself: it is not a general tool for investigating a party’s decision-making process, but a procedural mechanism directed to the fair resolution of issues properly in dispute.

[39]At the centre of the Appellant’s case lies its objection to HMRC’s refusal to grant relief under Reg 9(4), condition B. The Appellant’s submission is that it cannot understand why that conclusion has been reached and that, absent disclosure of the underlying material, it is placed at a serious disadvantage in preparing its case. That submission has a superficial attraction, particularly where, as here, the Appellant points to differing treatment in other periods and to what it considers to be an absence of explanation.

[40]However, the difficulty with that submission is not practical but jurisdictional. The question is not whether the Appellant would find it helpful to understand HMRC’s reasoning. It is whether the Tribunal has jurisdiction to consider that reasoning at all. The answer to that question is provided by the decision of the Court of Appeal in Beech. The Court of Appeal made clear that, although the statutory scheme permits a contractor to raise Reg 9 in order to prevent a determination becoming final, it does not confer upon this Tribunal jurisdiction to determine whether condition B is satisfied. That question lies outside the appellate jurisdiction and, if contested, must be resolved by judicial review.

[41]That conclusion has a direct and decisive consequence for the present application. The scope of disclosure is therefore necessarily constrained by the scope of the Tribunal’s jurisdiction. It cannot extend to material which is relevant only to issues which the Tribunal has no power to determine. Disclosure cannot be treated as conceptually separate from, or independent of, jurisdiction. The relevance of documents for the purpose of disclosure depends upon whether those documents bear upon an issue that the Tribunal can determine. Where the issue itself is not within the Tribunal’s jurisdiction, documents which relate only to that issue cannot be relevant, however informative or illuminating they might be in some broader sense. To permit disclosure in those circumstances would be to allow the Tribunal’s procedural powers to be used to circumvent the limits placed upon its substantive jurisdiction.

[42]The Appellant sought to avoid that conclusion by submitting that the refusal of condition B forms part of the “factual matrix” of the appeal. It is correct that the refusal provides the context in which the determination was made but context is not the same as justiciability. The Tribunal may properly recognise that a refusal has occurred; it may not examine whether that refusal was justified. The distinction is not academic but substantive. The Tribunal’s function is limited to determining those issues which Parliament has specified to be determined under the relevant statutory provisions. In this context, the Appellant’s request for disclosure is directed not to facts which the Tribunal must evaluate but to reasoning which it is not entitled to consider.

[43]The Appellant’s submission that the absence of reasons is itself a basis for ordering disclosure raises a separate but related issue. It is, of course, desirable that decisions affecting taxpayers be explained clearly. But the absence of explanation does not, of itself, confer jurisdiction where none exists. Nor does it justify the exercise of the Tribunal’s powers in aid of an inquiry which falls outside its remit. If the Appellant considered that the refusal of condition B was vitiated by a failure to give reasons or was otherwise legally flawed, the appropriate forum for that challenge was judicial review. The Tribunal cannot be used as a substitute for that process. To hold otherwise would be to allow the scope of appellate jurisdiction to be expanded through procedural mechanisms in a manner contrary to the statutory scheme.

[44]When the focus shifts from condition B to the determination itself, the Appellant’s challenge to the determination does not materially alter in substance. The Appellant’s grounds, as articulated, rely on the proposition that the subcontractor paid the relevant tax and that there was therefore no loss to HMRC. That proposition is not an independent line of attack on the determination; it is the substance of a Reg 9(4) condition B argument expressed in different terms. As the Court of Appeal made clear in Beech, the Tribunal cannot resolve that argument. Once that is recognised, the logical consequence is that the Appellant’s reliance on Reg 9(4) condition B does not constitute a justiciable ground of appeal within the Tribunal’s jurisdiction. The appeal cannot be sustained on that basis and disclosure directed to supporting that basis cannot be justified.

[45]HMRC submits that the Appellant’s ground of appeal in respect of the determination should be struck out pursuant to Rule 8(2)(a) of the Rule on the basis that it falls outside the jurisdiction of the Tribunal. It is therefore necessary to consider whether, in light of the conclusions set out above, that application should be granted.

[46]The Appellant’s pleaded ground of appeal in respect of the determination is that the subcontractor accounted for and paid the relevant tax and that, as a consequence, no loss arose to HMRC. As already noted, that contention is, in substance, a reliance upon Reg 9(4) condition B. The Appellant does not advance any separate or independent challenge to the determination which does not depend upon that proposition.

[47]The effect of the decision of the Court of Appeal in is that the Tribunal does not have jurisdiction to determine whether Reg 9(4) condition B is satisfied. Although a taxpayer may raise the operation of Regulation 9 as part of the procedural context of an appeal against a determination under Regulation 13, the Tribunal is not entitled to adjudicate upon a dispute as to whether condition B is met. Such a dispute may only be resolved by way of judicial review or agreement between the parties.

[48]In the present case, the Appellant seeks to rely upon condition B not merely as part of the background, but as the substantive basis upon which the determination is said to be excessive or wrong. In effect, the Appellant invites the Tribunal to determine that condition B is satisfied and that the determination should therefore be reduced or set aside. That is not a matter within the Tribunal’s jurisdiction.

[49]There is no suggestion that any judicial review proceedings have been brought or are pending in relation to HMRC’s refusal to grant condition B relief. The Tribunal is therefore not in a position where it can give effect to any external determination of that issue. The Appellant’s case stands or falls on a contention which the Tribunal is not empowered to determine.

[50]In those circumstances, the ground of appeal does not disclose any issue within the Tribunal’s jurisdiction. It follows that Rule 8(2)(a) of the Rules is engaged and that the appropriate course is to strike out the Appellant’s ground of appeal in respect of the determination, insofar as it depends upon Reg 9(4) condition B.

[51]For the avoidance of doubt, this conclusion does not determine whether condition B is or is not satisfied. It reflects only the limits of the Tribunal’s jurisdiction. The consequence is that the Appellant’s challenge to the determination, as presently pleaded, cannot proceed and any remaining issues in the appeal are confined to the penalty.

[52]The Appellant sought to derive additional force for its application from the penalties imposed under Schedule 55. It argued that the absence of any tax loss is incompatible with the imposition of a substantial tax-geared penalty and that disclosure is necessary to understand how HMRC has approached that issue. That submission, however, rests on a misunderstanding of the statutory scheme.

[53]The relevant provisions of Schedule 55 make clear that the penalty is calculated by reference to a hypothetical figure: the amount which would have been shown in a compliant return delivered on time. The structure of the Schedule therefore separates two concepts. The first is the notional liability at the time of default. The second is the ultimate liability after all adjustments and reliefs have been applied. The penalty regime operates on the former, not the latter. The Appellant’s contention, that the penalty must reflect the absence of ultimate tax liability, is therefore a disagreement as to the proper construction of the statute. It does not depend upon any disputed factual material.

[54]That distinction between law and fact is critical in the context of disclosure. Where the issue is one of statutory interpretation, the Tribunal resolves it by analysing the language of the legislation, any relevant authorities and the established facts. There is no role for the internal reasoning of the decision-maker. The Appellant will be entitled to advance its submissions on the proper construction of Schedule 55 and to challenge HMRC’s position. It does not require, for that purpose, disclosure of material which HMRC has not relied upon. Even if aspects of the penalty involve findings of fact, those matters fall to be established by the evidence relied upon by HMRC and do not give rise to any requirement for disclosure of its internal deliberations

[55]The question whether HMRC has discharged its burden of demonstrating that the penalties have been correctly imposed also does not justify disclosure. HMRC accepts that it bears that burden. If it fails to produce sufficient evidence at the substantive hearing the Appellant will succeed. The procedural mechanism for testing HMRC’s case is through evidence and cross-examination not through disclosure of its internal deliberations.

[56]The Appellant’s reliance on the possibility that HMRC may not have considered reasonable excuse or special reduction requires separate consideration. Such matters are capable, in principle, of falling within the Tribunal’s jurisdiction on a penalty appeal. However, two features of the present case are determinative. First, the Appellant has not pleaded any such grounds. The Tribunal determines appeals on the case as advanced. Disclosure is not a means by which a party may explore whether new grounds might be available. Secondly, the statutory burden in relation to reasonable excuse lies on the Appellant. The relevant question is whether the Appellant can demonstrate, by its own evidence, that it had a reasonable excuse. HMRC’s internal documents cannot establish that fact.

[57]The Appellant sought to rely on White and Hardy in support of its submission that disclosure is required to determine whether HMRC has acted lawfully. Those authorities do not advance the Appellant’s case in this context. They were concerned with whether HMRC’s decisions were flawed in a public law sense because of a failure to consider relevant matters. In the present context, the Tribunal’s task is not to review the adequacy of HMRC’s reasoning but to determine the issue on its merits. Even if HMRC had failed to consider special reduction that would not of itself determine the outcome. The Tribunal would consider whether such a reduction should be made. The focus is therefore on the existence of relevant circumstances not on HMRC’s prior reasoning.

[58]The Appellant also relied on the broad approach to relevance articulated in Tower Bridge and Ingenious, in particular the concept that documents which may lead to a “train of enquiry” may be relevant. That principle is well established, but it does not advance the Appellant’s case in this context. The width of the concept of relevance does not displace the requirement that the enquiry must be directed to an issue the Tribunal can determine. A train of enquiry which leads only to matters outside jurisdiction or to issues not properly raised does not satisfy that requirement.

[59]HMRC placed reliance on the decision in Seven Capital in which a similar disclosure application in a CIS penalty context was refused. While that decision is not binding it is closely analogous in its facts and reasoning. It reflects the principle that, in an appeal under Schedule 55, the Tribunal’s task is to apply the statutory provisions to the facts and that it does not require access to HMRC’s internal decision-making process in order to do so. I consider that reasoning to be persuasive and consistent with the statutory framework.

[60]Finally, even if the Appellant were correct in principle to seek disclosure, the scope of its request would present difficulty. It seeks “all internal HMRC documents” relating to both the penalty and the refusal of condition B. That is, in substance, an open-ended request for disclosure of HMRC’s internal deliberations. The Tribunal’s powers are not intended to facilitate such an inquiry. Disclosure must be focused and proportionate. A request of this breadth, directed as it is to material, which is not relevant to issues within jurisdiction, cannot be justified.

[61]Drawing those threads together, the Appellant’s application for disclosure is directed to three distinct categories of issue. The first is the refusal of relief under Reg 9(4) condition B. The second concerns the calculation and validity of the penalties under Schedule 55. The third relates to the possible application of reasonable excuse and special reduction.

[62]The first category falls outside the jurisdiction of this Tribunal. For the reasons set out above, the Tribunal has no power to determine whether Reg 9(4) condition B is satisfied. The Appellant’s challenge to the determination depends entirely upon that contention. It follows that the Appellant’s ground of appeal in respect of the determination, insofar as it relies on Reg 9(4) condition B, does not fall within the Tribunal’s jurisdiction and is struck out pursuant to Rule 8(2)(a) of the Rules. Material directed solely to that issue is not relevant for the purposes of disclosure.

[63]The second and third categories fall within the Tribunal’s jurisdiction, but do not justify the disclosure sought. The issues arising in relation to the penalties are, in substance, matters of statutory construction and application which can be determined without recourse to HMRC’s internal deliberations. The Appellant has not pleaded any case based on reasonable excuse or special reduction and, in any event, the burden of proof in relation to those matters lies upon it. In those circumstances, the material sought is not relevant to any issue which the Tribunal is required to determine.

Conclusion

[64]For the reasons given above, the Appellant’s application for disclosure is refused. The Appellant’s ground of appeal in respect of the determination, insofar as it relies on Reg 9(4) condition B is struck out.

Right to apply for permission to appeal

[65]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: 28 May 2026