Derek Hosie v The Commissioners for HMRC

An appeal to the Upper Tribunal lies only on a point of law. Permission requires an arguable error of law in the First-tier Tribunal’s decision which was material to the outcome; an arguable case must have a realistic, rather than fanciful, prospect of success. Allegations of fraud, equitable maxims and public-interest considerations do not provide a freestanding remedy. Their relevance depends on the statutory framework, the facts found and the issue decided below. Authorities concerning judgments obtained by fraud or profits obtained through wrongdoing do not govern a case where the alleged fraud concerns an underlying tax return and the act challenged is the taxpayer’s later withdrawal of his appeal.

The applicant had withdrawn his appeal to the First-tier Tribunal against a closure notice concerning repayment of tax following an allegedly false claim for EIS relief. He later sought reinstatement, but his application was out of time. The First-tier Tribunal held that, by virtue of section 54(4) of the Taxes Management Act 1970, the appeal was deemed settled and that it had no jurisdiction to extend time.

The Upper Tribunal had previously granted permission on one ground concerning that jurisdictional conclusion. Following an oral renewal hearing, the applicant sought permission on further grounds concerning fraud, duress, equitable principles, public interest, delay and the validity of an online self-assessment return. The issue was whether any further ground disclosed an arguable and material error of law.

1. Permission test. Under section 11(1) of the Tribunals, Courts and Enforcement Act 2007, an appeal lies only on a point of law. Permission requires an argument with a realistic prospect of success which identifies an error material to the First-tier Tribunal’s decision.
2. Scope of the decision. The First-tier Tribunal had decided the jurisdictional consequences of a late application to reinstate a withdrawn appeal. It had not decided the underlying allegations concerning the former agent, the validity of the self-assessment return, or whether fraud had occurred in the applicant’s case. Those matters therefore could not establish an error in the decision under challenge.
3. Self-assessment and bills of exchange. A self-assessment return is not a bill of exchange within section 3 of the Bills of Exchange Act 1882. The submission concerning the absence of a physical signature was also irrelevant to the issue determined by the First-tier Tribunal, which concerned withdrawal, reinstatement and the operation of section 54 of the Taxes Management Act 1970.
4. Fraud, duress and equitable principles. Maxims such as fraud unravels everything do not operate as standalone remedies irrespective of statutory context and facts. Lazarus Estates Ltd v Beasley concerned a person seeking to retain an advantage obtained by fraud, while Takhar v Gracefield Developments Ltd concerned a judgment itself obtained by fraud. Neither authority governed the applicant’s challenge to his own later withdrawal of the appeal. The evidence and findings did not make pressure, financial hardship or the former agent’s conduct legally capable of invalidating that withdrawal.
5. Disposition. The grounds concerning credible fraud allegations, duress, public policy, delay and public interest disclosed no arguable material error of law. Permission to appeal was refused on all further grounds. Permission remained granted on the separate jurisdictional ground identified in the earlier papers decision.

• First-tier Tribunal (Tax Chamber): decision released on 13 March 2025, refusing reinstatement of the withdrawn appeal because the application was out of time and the tribunal considered that section 54(4) of the Taxes Management Act 1970 left it without jurisdiction to extend time.
• First-tier Tribunal (Tax Chamber): permission to appeal refused on 22 May 2025.
• Upper Tribunal (Tax and Chancery Chamber): permission granted on one jurisdictional ground and refused on the remaining grounds on paper on 27 August 2025. Following an oral renewal hearing, permission was again refused on all further grounds.