In Whitefields Golf Club Ltd & Others v HMRC,[1] the First-tier Tribunal (Tax Chamber) ('FTT') suspended the effect of its decision in relation to information notices issued by HMRC pursuant to paragraph 1, Schedule 36, Finance Act 2008 (the 'information notices') which it had, less than two months earlier, confirmed on appeal. The reason for the suspension was that the taxpayers intended to challenge the FTT's original decision by way of judicial review.

Background

HMRC issued the information notices to the taxpayers requiring them to deliver various documents and information. The taxpayers exercised their right to appeal the notices and their appeals were heard by the FTT on 21 February 2014. The taxpayers' objection to the information notices was that the information and documents had already been provided to HMRC who had either destroyed or lost what had been provided to it. The FTT issued its summary decision, dismissing their appeals, on 4 April 2014. The FTT's summary decision confirmed the information notices (subject to one slight amendment), and imposed a 42 day time period for the taxpayers to comply with them. The deadline would, therefore, expire on 16 May 2014. There is no right to appeal against a decision of the FTT confirming an information notice.[2]  

The FTT subsequently received a request to set out full findings of fact and reasons for its summary decision. The FTT issued its full findings of fact and reasons on 13 May 2014.

On 15 May 2014, the FTT received, by email, an application to suspend the effect of its earlier decision 'pending the determination of this matter by the Upper Tribunal on an appeal and/or judicial review'. The application requested that the FTT exercise its powers under rule 5(2) and 5(3)(1) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.

Rule 5(2) provides the FTT with a broad power to give directions "in relation to the conduct or disposal of proceedings at any time, including a direction amending, suspending or setting aside an earlier direction."

Rule 5(3)(1) provides that, without restricting the general power contained in 5(2), the FTT may by direction "suspend the effect of its own decision pending the determination … of an application for permission to appeal, a review or an appeal."

FTT's decision

The FTT, constituted by Judge Kevin Poole (who had also been on the panel which issued the FTT's original decision) released its decision on 21 May 2014. It did so without hearing any representations from HMRC on the taxpayers' application.

The FTT was of the view that Rule 5(3)(1) could not be relevant in the circumstances of the present case as it only applied in contemplation of an application for permission to appeal, a substantive appeal, or a review. That was plainly not the case here, as statute had specifically excluded the right to appeal the FTT's original decision in relation to the information notices.

However, the FTT considered that Rule 5(3)(1) expressly did not restrict its wider powers contained in Rule 5(2). The question, therefore, was whether it should exercise its powers under Rule 5(2).

The FTT noted that, from HMRC's point of view, the issue of the information notices had been resolved with finality: the FTT had issued its decision confirming them, and parliament has specifically excluded any further right of appeal. However, the FTT noted that the taxpayers clearly considered there to be a supervisory power residing in the High Court and Upper Tribunal by which, through judicial review, this un-appealable decision could be challenged. The FTT further noted that the taxpayers' potential remedies through that process would effectively be nullified if the FTT did not suspend its original decision, because the taxpayers would have to comply with the information notices to avoid incurring substantial daily penalties.

Overall, the FTT was of the view that, particularly given any delay would be short because of the narrow judicial review timetable, the 'balance of fairness militates in favour of allowing the suspension'. It therefore directed that the deadline for compliance with the information notices be extended until 4 July 2014, subject to the taxpayers having made a judicial review application by that date. It also made further alternative directions for the period after 4 July 2014, depending on whether a judicial review application had, in fact, been made.

Comment

The FTT's decision to suspend its previous decision was sensible in light of the new – and indeed somewhat unexpected – circumstances which came to light, namely, the taxpayers' intention to challenge the FTT's original decision by way of judicial review and the fact that any such judicial review would be rendered meaningless if the FTT refused to suspend its decision.

Given the extent to which HMRC relies upon its information powers, this decision is a welcome reminder that although there is no right of appeal against a decision of the FTT confirming an information notice, taxpayers should always consider whether the circumstances of their case are such that it would be appropriate to challenge the FTT's decision by way of judicial review.