Digital Buying Partners Limited v The Commissioners for HMRC

Eligibility conditions under the Coronavirus Job Retention Scheme which require an employee to appear in an RTI return by the relevant CJRS day are standalone, bright-line requirements. They do not confer a discretion on HMRC to extend the relevant date by applying public law principles of fairness, consistency or discretion. An express discretion relating to late claims does not enlarge the separate eligibility conditions. Permission to appeal requires an arguable, material error of law carrying a realistic prospect of success.

Digital Buying Partners Limited sought permission to appeal from the First-tier Tribunal’s decision that two employees were ineligible for CJRS payments because they were not included in an RTI return submitted by 19 March 2020. The First-tier Tribunal refused permission on five grounds. The Upper Tribunal initially refused permission on paper, and the applicant renewed its application for an oral hearing.

The renewed arguments concerned alleged HMRC discretion, inconsistent treatment of another taxpayer, public law fairness, new evidence, and procedural fairness. The applicant also sought a stay of penalties and interest and a protective costs order.

1. Permission to appeal refused. An appeal to the Upper Tribunal lies only on a point of law, and permission requires an arguable material error of law with a realistic prospect of success.
2. The relevant CJRS eligibility condition required the employee’s earnings to be shown in an RTI return made on or before 19 March 2020. The condition was a standalone, bright-line requirement. The wording that an employer “may make a claim” conferred discretion on the employer whether to claim, not on HMRC whether to waive the eligibility condition.
3. The provisions governing late claims were materially different. They expressly allowed HMRC to accept a claim after the relevant deadline where there was a reasonable excuse and the claim was made within further time allowed by HMRC. That express power did not apply to the separate eligibility requirement.
4. The applicant’s additional evidence was admitted under the Tribunal’s discretion, applying the persuasive approach discussed in Ketley v HMRC [2021] UKUT 218, including considerations of reasonable diligence, likely influence on the result and apparent credibility. The evidence was credible and relevant, but it could not establish an arguable error of law because the alleged inconsistent treatment could not alter the statutory eligibility condition.
5. The approach in KSM Henryk Zeman SP Zoo v HMRC [2021] UKUT 182 required consideration of whether a statutory scheme expressly or impliedly excluded a public law argument. The CJRS provisions did so in relation to the relevant CJRS day: fairness, consistency and alleged discretion could not expand the statutory entitlement.
6. The Upper Tribunal had no jurisdiction in this appeal to direct HMRC to suspend penalties or interest, which were outside the subject matter of the First-tier Tribunal appeal. The protective costs application was not decided because permission to appeal was refused.

• Upper Tribunal (Tax and Chancery Chamber): Permission to appeal was refused following oral renewal.
• First-tier Tribunal (Tax Chamber): The decision released on 9 May 2024 determined that the two employees were not eligible for CJRS payments. Permission to appeal was refused on 25 July 2024.