Background
Complete Electrical Services (NW) Ltd (CESL) appealed against HMRC’s VAT assessment for periods from October 2015 to January 2019, totalling £46,791 as amended. The First-tier Tribunal dismissed that appeal, finding that HMRC had made the assessment to the best of its judgment using an appropriate methodology and that CESL had not proved the assessment wrong.
CESL sought permission to appeal on three related grounds. It said that technical problems at the remote FTT hearing prevented its representative from rejoining, that the FTT unfairly excluded accounting records and VAT schedules sent after the hearing, and that exclusion of those materials could have affected the outcome. The FTT and then the Upper Tribunal on the papers refused permission. CESL applied for reconsideration at an oral hearing.
The Court’s Holding
Judge Jeanette Zaman refused permission to appeal. An appeal to the Upper Tribunal lies only on a point of law, and CESL had not identified an arguable material error of law by the FTT.
The remote-hearing disruption had not made the proceedings unfair overall. CESL’s representative had already presented CESL’s case, heard HMRC’s submissions and cross-examined HMRC’s witness. No further oral submissions were made after the disconnection, and the FTT gave CESL 14 days to submit final written submissions. That was a pragmatic case-management response consistent with the overriding objective.
The FTT was also entitled to exclude the late documentation. It had been available before the hearing, but CESL had not produced it during HMRC’s investigation or the FTT proceedings. The directions for final written submissions did not invite new evidence, and admitting it would have prejudiced HMRC. The materiality ground therefore failed because it was not an independent challenge.
Key Takeaways
- Technical disruption in a remote hearing does not itself establish procedural unfairness; the question is the overall fairness of the hearing.
- A direction permitting written submissions is not ordinarily permission to file fresh evidence after the hearing.
- Parties must produce relevant evidence in time; an oversight by their representative does not require the tribunal to shift resulting prejudice to the opposing party.
Why It Matters
The decision underlines the narrow scope of Upper Tribunal appeals in tax cases. Dissatisfaction with an FTT case-management decision will not suffice unless there is an arguable legal error that was material to the result.
It also reinforces the importance of preparation and timely disclosure in tribunal litigation, particularly where a party seeks to challenge an HMRC assessment using reconstructed schedules or other evidence requiring scrutiny.