TP (Evenlode) LLP v The Commissioners for HMRC [2026] UKFTT 831 (TC)

[2026] UKFTT 00831 (TC)Case No TC 09904
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 29 May 2026Date Judgment date: 02 June 2026
On the papers
Appeal reference: TC/2021/02143
VAT – strike out application against Appellant for non-compliance with unless order – failure to comply not established – application dismissed
Before
TRIBUNAL JUDGE MATTHEW DONMALL
Between
TP (Evenlode) LLPAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentDECISION

Introduction

[1]This is HMRC’s application for a strike out of the Appellant’s appeal made on 29 April 2026 (the Application). The basis of the Application is that there has been a failure to comply with direction 1 of the Tribunal’s directions issued on 20 November 2025.[2]For the reasons set out below, I dismiss the Application.

The substantive appeal

[3]This appeal relates to four VAT assessments in respect of periods 02/17 for £6,638, 05/17 for £12,809, 08/17 for £394,039 and 11/17 for £473,188 which were made by HMRC on 12 December 2019 (the Assessments). The basis of the Assessments was articulated as being that the HMRC officer had been unable to verify any of the input tax claimed by the Appellant and so had assessed on the basis of a flat rate net VAT position of 12% of the gross sales.[4]The making of the Assessments was preceded by a period of investigation by HMRC, in the course of which HMRC served two notices under paragraph 1 of Schedule 36 to the Finance Act 2008 requiring the Appellant to provide documentation as identified in the schedules thereto (the Schedules).(1) The schedule dated 14 August 2019 was in respect of periods 02/17 to 08/17, and required VAT accounts and ledgers for the periods, copies of the highest value sales and purchase invoices (five for 02/17 and 05/17, ten for 08/19), bank statements (“Copies of all the bank, building society and co-operative society account statements used for business purposes during this entire 01 December 2016 to 30 August 2017 period.”) and copies of the most recent two years of annual accounts.(2) The schedule dated 6 November 2019 in respect of period 11/17 was in broadly similar terms in terms of statutory records or information, requiring VAT audit trail, copies of six highest purchase invoices, sales invoices, and zero-rated sales invoices, and also “All the bank, building society and co-operative society account statements used for business purposes in this entire period.” It also set out a number of further information requests.[5]The Appellant’s substantive case in the Notice of Appeal is in essence that it disputes the disallowance of input tax as claimed.[6]HMRC’s Statement of Case of 18 December 2024 contends that it is for the Appellant to show that it is entitled to the input tax and it has failed to provide sufficient evidence to do this, and defends the Assessments on the basis that they were made to best judgment, being assessed as 12% on the gross sales declared by the Appellant in their VAT returns.[7]In substance, therefore, the underlying appeal concerns the Appellant’s input tax claims as made in its VAT returns.

Procedural background

[8]This appeal now has a lengthy procedural history since it was brought in June 2021. For present purposes:(1) The claim was issued on 10 June 2021.(2) After a hardship application was successful, there was then a determination of HMRC’s objection to the appeal on the basis of a contention that it was late. That was heard by the Tribunal by way of a remote hearing on 16 August 2023, and a full written judgment was released on 11 April 2024.(3) On 18 December 2024, HMRC served their Statement of Case.(4) On 29 March 2025, the Tribunal issued case management directions for the exchange of list of documents, witness statements, listing information and other matters in preparation for a substantive hearing.(5) On 4 July 2025, HMRC applied for an unless order on the basis that the Appellant had not provided its list of documents, witness statement or listing information.(6) On 26 July 2025, the Tribunal made an unless order in the terms sought.(7) On 9 August 2025, the Appellant confirmed that it wished to continue with its appeal, attached a list of documents and listing information, but did not intend to rely on a witness statement. The list of documents included a number of input invoices, including from ‘ICA Network Solutions LLP’.(8) On 3 September 2025, the Tribunal listed the appeal for a face to face hearing for one day on 19 November 2025.(9) On 19 November 2025, the Tribunal (Judge Matheu Smith and Member Catherine Farquharson) adjourned the hearing and made directions, which were released in writing on 20 November 2025 (the November 2025 Directions). Of these, Direction 1 and Direction 2 are the basis on which HMRC advances the present Application: 1. Not later than 17 December 2025 TP (Evenlode) LLP must serve upon HMRC the following: (1) The documents and information specified in the schedules to the Information Notices dated 14 August 2019 and 06 November 2019. Copies of those schedules appear at pages 42 and 52 of the hearing bundle. Should TP (Evenlode) LLP not be able to provide some of these documents and/or that information it should say so and explain why. (2) Any other documents which TP (Evenlode) LLP wishes to be included in the hearing bundle and rely upon at the hearing of the appeal. 2. Unless TP (Evenlode) LLP complies with Direction 1 its appeal will be Struck Out automatically pursuant to rule 8(1) Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. That means its appeal will be at an end and it will be liable to pay the sums assessed by HMRC. The November 2025 Directions also made provision for witness evidence (Direction 4) and for HMRC to make an application for any further steps such as further evidence before the final hearing (Direction 5)(10) On 15 December 2025, the Appellant sent HMRC material, being “Sales invoices for the 4 periods 02/17 to 11/17 inclusive”, “Bank statements 01/12/2016 to 30/11/2017 inclusive” and “The detailed audit trail for the 4 periods 02/17 to 11/17 inclusive”. It added “The other information requested follows by email.”(11) On 17 December 2025, the Appellant sent a copy of a witness statement from Julian Langridge, a member of the Appellant partnership. That statement asserted compliance with Direction 1 and went on at para 32:
“We have however, so far, been unable to track down some purchase invoices and formal accounts from our archive storage. We are sure we do still have them, but they date from eight years ago and have gone into our archives and back up computer disks. It will take us a few more days to locate these items before we can send them on by email to HMRC…” (12) On 22 January 2026, the case officer at HMRC emailed the Appellant stating (among other points) that he was unable to identify in the bank statements provided that the certain invoices had been paid by the Appellant. He asked “Could you provide bank statements showing the following invoices being paid”. namely invoices 1058, 1059 and 1060 from ICA Network Solutions LLP, the VAT on which was £4,000, £535,000 and £634,360 respectively (the ICA Invoices). (13) On 16 February 2026, HMRC wrote to the Tribunal stating that the Appellant has only partially complied with Direction 1, seeking to allow the Appellant “a final opportunity” to provide the necessary documents and asking for an extension of time to 18 March 2026 for HMRC to comply with Direction 5. (14) On 25 February 2026, the Tribunal granted the extension of time requested by HMRC. (15) On 17 March 2026, the Appellant wrote to the Tribunal providing further documents and information asserting regarding the purchase invoices, that it had attached those which it still had in its possession, but “a few are missing and, having searched extensively, we must conclude that, after a period of more than eight years and several office moves, we no longer have those few which we are missing”
. It also asserted that accounts for the year to 30 September 2015 were provided, but those for the year 30 September 2016 were not in its possession and attached instead a statutory abridged account. The attached invoices included the ICA Invoices. (16) On 20 March 2026: (a) HMRC wrote to the Tribunal that no more documentation had been provided by the Appellant further to HMRC’s email of 16 February 2026 and so HMRC sought a strike out. (b) The Appellant replied to the Tribunal drawing its attention to the Appellant’s email of 17 March 2026. (c) In light of the Appellant’s response, HMRC then withdrew the strike out application: “I confirm my agreement that in the circumstances a strike-out of this appeal is NOT appropriate.”. (17) On 30 March 2026, HMRC sought copy of the invoices that had been attached to the Appellant’s 17 March 2026 email. (18) On 13 April 2026, the Tribunal asked for the parties “to confirm the current position” within 7 days in light of the correspondence from 17 March to 30 March. (19) On 20 April 2026, HMRC wrote to the Tribunal. Among other things, this email made the following points: 2. On 16 December 2025, the Appellant has provided some information via post to HMRC. That information comprised material already held by HMRC, namely sales invoices and VAT accounts for the periods 02/2017–11/2017, together with bank statements covering 1 December 2016 to 30 November 2017. 3. While bank statements were provided, they did not evidence payment of invoices 1058, 1059 and 1060, which account for the majority of the input tax disallowed. Accordingly, no documentary evidence was supplied to demonstrate that the relevant supplies had been paid for. … 5. The Respondent’s position is that the bank statements provided were of limited assistance. They enabled an attempt to identify whether supplies may have been made or received, but they did not evidence payment for the supplies at issue. 6. On 22 January 2026, the Officer Duncan emailed Mr Langridge requesting the omitted information, namely the two most recent years’ Annual Accounts. 7. Although those documents were not expressly requested under the Schedule 36 notice issued by Mr Clarke, Officer Duncan additionally identified three specific invoices and requested corresponding bank statements evidencing payment. The Respondent’s position is that such evidence would have materially assisted in confirming that the supplies had been paid for and may have enabled the appeal to be resolved. 8. On 16 February 2026, Mr Imam notified the tribunal and the Appellant that certain documents were provided and certain documents were outstanding therefore leaving the direction 1 partially completed. Also as attachments provided the request for information communication from Officer Duncan to Mr Langridge to provide the following documents: Bank statements showing the following invoices being paid: [the ICA Invoices] 9. On 17 March 2026, although Mr Langridge possessed Officer Duncan’s email address and had previously consented to communicate via email, the documents were sent to Mr Imam instead. As Mr Imam was on leave, these documents were subsequently forwarded to Officer Duncan on 8 April 2026. 10. However, the information submitted by the Appellant on 17 March 2026 did not correspond to what Officer Duncan had requested, as outlined in paragraph 8. The materials consisted of additional purchase invoices already in the Respondent’s possession, alongside the complete Annual Accounts for 2015 and the abridged Annual Accounts for 2016. 12. Therefore, unless the Appellant provides the Respondent with all information specified in paragraph 8—without omissions—within seven days of this application, the Respondent requests that the appeal be struck out. It is the Respondent’s view that the Appellant has been given ample opportunity and reasonable time to supply the required documents. (20) On 29 April 2026, HMRC made the present Application: The Respondents write further to our application for Strike Out dated 20 April 2026, and the Tribunal’s Directions in response, dated 13 April 2026. The Appellant has failed to: 1. Provide the documents outstanding since 22 January 2026. 2. Respond to the Tribunal’s Directions of 13 April 2026, setting out their position. For completeness, the documents requested by the Respondents are as noted in the below table: [the ICA invoices] The Appellant has failed to provide the outstanding documents within the timescales Directed by the Tribunal. It has now been 97 days since the Respondents requested the above documents, and the Appellant has not provided, despite follow-up requests from the Appellant, any of the above documents, nor has the Appellant responded to the Tribunal’s own Directions dated 13 April 2026. In light of the Appellant’s failure to provide the documents and / or respond to the Tribunal’s correspondence, the Respondents hereby request that this matter be STRUCK OUT as originally directed at the hearing that took place on 19 November 2025. (21) On 30 April 2026, the Appellant submitted a second witness statement from Mr Langridge, which contained a response to HMRC’s email of 20 April 2026. In particular: 11. The Respondents' email paragraphs 3, 5, 7, and 8 refer to the Respondents' difficulty analysing the bank statements which we served on them in accordance with the Tribunal's Directions. I understand the Respondents are requesting further input from me to help them with this. I can provide that help, but I suggest their need for further assistance is not grounds to have our Appeal Struck Out. We have complied with the Direction dated 20th November 2025 which clearly specified the information required. We have served that information upon the Respondents.

Discussion

[9]There are two aspects to the Application. The first is that the appeal should be struck out automatically due to a failure to comply with Direction 1. The second is the reliance on the Appellant’s failure to comply with the Tribunal’s direction for an update of 13 April 2026.

The Direction 1 issue

[10]Rule 8(1) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) 2009 provides that proceedings will automatically be struck out if the appellant has failed to comply with an unless order that stated that non-compliance would lead to striking out: (1) The proceedings, or the appropriate part of them, will automatically be struck out if the appellant has failed to comply with a direction that stated that failure by a party to comply with the direction would lead to the striking out of the proceedings or that part of them.[11]If proceedings are struck out under rule 8(1), then rule 8(5) provides for an opportunity for the appellant to apply for the proceedings to be reinstated. Any such application would fall to be determined in light of rule 2, which requires the Tribunal to give effect to the overriding objective of dealing with cases fairly and justly.[12]The first question before me therefore is whether the Appellant has in fact failed to comply with Direction 1. If the Appellant has failed to so comply, then Direction 2 provided that the appeal would be automatically struck out under rule 8(1), albeit that the Appellant would then have an opportunity to apply for reinstatement.[13]Strictly, the basis on which HMRC advanced its application of 29 April 2026 as regards Direction 1 is that the Appellant had failed to provide copies of the ICA Invoices. That contention is factually incorrect, as those invoices had been provided by the Appellant (indeed, they were included within the bundle for the November 2025 hearing).[14]Read together with the prior email of 20 April 2026, I take the intended basis for the Application in substance to be that the Appellant has failed to provide “Bank statements showing the [ICA Network Solutions invoices] being paid”. That is the contention advanced in the 20 April 2026 email at paragraphs 5, 8 and 12. However, I do not accept this contention as a basis for a finding that Direction 1 was not complied with. As HMRC accepted at para 2 of its 20 April 2026 email, bank statements covering 1 December 2016 to 30 November 2017 were provided by the Appellant on 15 December 2025 (indeed, they may have already been provided at an earlier point in time). Rather, HMRC’s complaint appears to be that those bank statements do not evidence the payment of the three ICA Invoices. That may or may not be correct (from his witness statement of 30 April 2026 that Mr Langridge appears not to accept this). But either way, the question of what the bank statements show is a separate question to whether the Appellant has provided the bank statements. HMRC in their Application have not identified any further bank statements which they say should have been provided but have not been. I therefore do not consider that HMRC have established that there has been any failure to provide bank statements as required in Direction 1.[15]In any case, there would have been a further problem with the Application. Direction 1 included a qualification, namely “Should TP (Evenlode) LLP not be able to provide some of these documents and/or that information it should say so and explain why.” Therefore the mere fact of the non-production of some document sought in the Schedules would not of itself be sufficient to mean that Direction 1 had not been complied with, as HMRC seem to contend. If, for example, the Appellant could not find in its possession a particular document, that would not of itself necessarily constitute non-compliance resulting in an automatic strike out. It should also be remembered that the burden in this appeal is on the Appellant. HMRC made its Assessments on the information available to them at the time. The Appellant now seeks to appeal those Assessments. If there is an evidential deficiency in terms of establishing the Appellant’s case in the underlying documentation, then that is a problem for the Appellant, not HMRC.

The update direction issue

[16]HMRC additionally contend that the Appellant’s failure to provide an update within 7 days of 13 April 2026 is a basis for striking out the Appellant’s appeal.[17]I reject this contention. The Tribunal’s direction of 13 April 2026 did not state that failure to comply would lead to the striking out of the appeal, as rule 8(1) requires, nor did it state that failure could lead to the striking out of the appeal, as a strike out under rule 8(3)(a) would require. Therefore the only basis on which HMRC could advance its contention under this head is that the failure to provide an update within 7 days as required would satisfy rule 8(3)(b), namely that the Appellant “has failed to co-operate with the Tribunal to such an extent that the Tribunal cannot deal with the proceedings fairly and justly”. In my judgment, the failure of the Appellant to provide an update within 7 days on “the current position” does not come anywhere near to meeting that threshold. In any case, the main uncertainty arising from the correspondence of the parties of 17 March to 30 March would appear to have been HMRC’s position, given that HMRC made a strike out application on 20 March, only to withdraw it later that day (which withdrawal, it is noted, HMRC’s subsequent application of 29 March failed to acknowledge).

Conclusions

[18]For the above reasons, HMRC’s application to strike out the appeal is dismissed.

Right to apply for permission to appeal

[19]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:02 June 2026