Steven Hague v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal is granted only where an alleged error of law has a realistic prospect of success, or exceptionally there is another compelling reason. An appellate tribunal will not revisit evaluative findings of fact merely because a party disagrees with them. The challenger must identify the material finding, the relevant evidence, and why the tribunal was not entitled to make it.

Fresh evidence will not ordinarily be admitted where it could reasonably have been obtained and deployed below, is delayed, and lacks sufficient cogency to affect the outcome. Allegations of procedural unfairness require a material and evidenced deficiency, not a bare assertion.

The First-tier Tribunal dismissed Mr Hague’s appeal against discovery assessments for income tax and capital gains tax, and associated penalties. It found that the residual unexplained credits were taxable income, upheld the assessments as validly made on a best-judgment basis, and found a chargeable gain on the disposal of a property.

Mr Hague renewed to the Upper Tribunal his application for permission to appeal after the First-tier Tribunal had refused permission. He challenged the factual findings, the treatment of records and witness evidence, the discovery assessments, the capital gains finding, and the fairness of the hearing. He also sought to introduce fresh witness evidence intended to show that he had ceased working at the family pub in 2011.

1. Permission to appeal was refused. The renewed grounds disclosed no arguable material error of law and had no realistic prospect of success. An appeal from the First-tier Tribunal lies only on a point of law under section 11 of the Tribunals, Courts and Enforcement Act 2007 (paras [13]-[14], [76]-[77]).
2. The challenges to the First-tier Tribunal’s conclusions about unexplained income, gambling receipts, witness reliability, employment at the pub, and the gain on the property were disagreements with factual and evaluative findings. They did not satisfy the stringent Edwards v Bairstow standard. The applicant had not identified the evidence relevant to each challenged finding or shown that the First-tier Tribunal was not entitled to make it (paras [15]-[17], [22]).
3. The First-tier Tribunal had been entitled to treat the contemporaneous police-interview summary and HMRC meeting records as reliable. The applicant had received them before the hearing and had a reasonable opportunity to challenge their accuracy. Its treatment of the third-party statements and its rejection of the wider explanation for the residual credits were also findings open to it on the evidence (paras [26]-[29], [37]-[42]).
4. The challenge to the discovery assessments was unarguable. The First-tier Tribunal had permissibly found that the subjective and objective conditions for a discovery under section 29 of the Taxes Management Act 1970 were met (paras [43]-[44]).
5. The application to admit fresh evidence was refused. The evidence could and should reasonably have been obtained for the First-tier Tribunal hearing or at an earlier stage of the permission applications. It was delayed and insufficiently cogent to affect the findings in any event. Admission was neither just and fair nor in the interests of justice (paras [57]-[65]).
6. The alleged procedural unfairness concerning the hearing, bundles and opportunity to present the case was unsupported by identified material evidence. The applicant had had a fair opportunity to engage with HMRC’s case and present his own (paras [47]-[52], [69]-[75]).

• Upper Tribunal (Tax and Chancery Chamber): Renewed application for permission to appeal refused in [2024] UKUT 436 (TCC).
• First-tier Tribunal (Tax Chamber): Dismissed the taxpayer’s appeal against discovery assessments and penalties in a decision released on 19 February 2024. It later refused permission to appeal on 12 July 2024.