KNR Flooring Ltd v The Commissioners for HMRC

An appeal to the Upper Tribunal lies only on a point of law, and permission requires an arguable error of law with a realistic prospect of success. The Upper Tribunal should not reweigh evidence or interfere with primary factual findings unless the First-tier Tribunal was plainly wrong or reached a conclusion no reasonable tribunal could reach. The weight given to competing evidence is principally for the fact-finding tribunal.

KNR Flooring Ltd applied for permission to appeal against the First-tier Tribunal’s decision concerning the reference pay used to calculate Coronavirus Job Retention Scheme payments for two directors. The First-tier Tribunal found that KNR had not shown that HMRC’s assessments overstated the payments due and refused permission to appeal.

KNR renewed its application on five grounds concerning the burden of proof, RTI data, conflicting documentary evidence, national insurance contributions, procedural fairness and accounting records. The central question was whether any ground disclosed an arguable and material error of law.

1. Permission refused. Permission to appeal was refused on all five grounds.
2. Under section 11(1) of the Tribunals, Courts and Enforcement Act 2007, an appeal lies only on a point of law. Permission requires an alleged error of law with a realistic, rather than fanciful, prospect of success.
3. Following Volpi v Volpi [2022] EWCA Civ 464, an appellate tribunal should not interfere with primary factual conclusions unless the tribunal below was plainly wrong. The weight given to evidence is principally for the fact-finding tribunal.
4. The First-tier Tribunal considered KNR’s evidence and submissions concerning salary, national insurance contributions, the Business Objects Report, RTI records, payslips and bookkeeping material. It identified the evidential challenges and explained why the evidence did not prove that the salary increase occurred during February 2020 or that HMRC’s information was incorrect.
5. The Upper Tribunal declined to reweigh the documents. Apparent inconsistencies did not make the First-tier Tribunal’s decision plainly wrong or one which no reasonable judge could have reached.

1. Upper Tribunal (Tax and Chancery Chamber): permission to appeal refused on all five grounds.
2. First-tier Tribunal (Tax Chamber): decision released on 9 May 2025; permission to appeal refused on 10 July 2025.