Assembly Global Networks Ltd v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal lies only on a point of law. Permission should be granted where the proposed appeal has a realistic prospect of success or, exceptionally, another compelling reason.

A challenge to factual findings must identify a legally material error, not merely disagreement with the evidence or conclusion. The appellant must identify the challenged finding, its significance, the relevant evidence, and why the tribunal was not entitled to make it. Reasonable inferences and multifactorial assessments remain matters for the first-instance tribunal unless they are irrational, perverse or unsupported by evidence.

Assembly Global Networks Ltd applied for permission to appeal against a preliminary decision of the First-tier Tribunal (Tax Chamber) concerning whether HMRC’s enquiry letter had been delivered before the statutory deadline for opening an enquiry into a research and development tax-credit claim.

The FTT found that the letter had been posted on 18 July 2022 and was deemed delivered on 28 July 2022. It rejected arguments concerning printing, franking, postal disruption and evidence relating to a copy letter sent to the company’s accountant. The FTT refused permission to appeal, and the Upper Tribunal reconsidered the renewed application at an oral hearing.

1. Permission test. Under section 11 of the Tribunals, Courts and Enforcement Act 2007, an appeal from the FTT lies only on a point of law. Permission requires a realistic, rather than fanciful, prospect of success, or exceptionally another compelling reason. The proposed grounds did not meet that threshold.
2. Factual findings. Applying Edwards v Bairstow [1956] AC 14 (HL), the question was whether no properly directed tribunal could have reached the findings. The Upper Tribunal could not interfere merely because it might have reached a different conclusion.
3. Evidence and inferences. The FTT was entitled to draw reasonable inferences from the print-service records and Officer Morris’s written evidence. It had sufficient evidence to find that the enquiry letter was printed, enveloped, addressed and franked. The evidence concerning the copy letter was ambiguous, but any possible error in the FTT’s treatment of it was immaterial because the FTT relied on other reasons for its conclusion.
4. Postal disruption. The FTT had conducted a detailed assessment of the evidence concerning disruption to postal services. It was entitled to find that an ordinary course of post had resumed on 25 July 2022 and that the letter would therefore have been deemed delivered on 28 July. Generalised assertions about continuing disruption did not identify evidence which the FTT had failed to consider.
5. Order. The findings were reasonably open to the FTT, were neither irrational nor unreasonable, and disclosed no arguable material error of law. Permission to appeal was refused on all grounds.

• Upper Tribunal (Tax and Chancery Chamber): permission to appeal refused on all grounds.
• First-tier Tribunal (Tax Chamber): preliminary issue determined in favour of HMRC; permission to appeal refused.