London Luton Hotel BPRA Property Fund LLP v The Commissioners for HMRC

A remittal must be construed objectively, read with the judgment accompanying the order. Where the earlier tribunal has determined the methodology for calculating an apportionment, a remittal to apply that methodology does not reopen the underlying issue. In a tax appeal, the tribunal may retain jurisdiction to determine outstanding quantum before the appeal is finally disposed of. That jurisdiction does not permit a party to relitigate an issue already determined, particularly after extensive litigation and where no intervening change in law requires reconsideration.

This was an appeal against a case management decision of the First-tier Tribunal, reported at [2024] UKFTT 001104 (TC). The proceedings arose from an earlier dispute concerning business premises renovation allowances and the apportionment of a residual amount within a development payment.

Following decisions of the First-tier Tribunal, Upper Tribunal and Court of Appeal, the Court of Appeal remitted the issue of the correct apportionment to the First-tier Tribunal, to be addressed in the manner referred to in the earlier decision. The First-tier Tribunal held that only the arithmetical calculation remained. The central issue was whether the remitter reopened the methodology of apportionment.

1. Appeal dismissed. The First-tier Tribunal had not erred in construing the Court of Appeal’s order or in refusing to reopen the methodology of apportionment.
2. A court order is construed objectively. The court asks what a reasonable person, possessing the background knowledge available to the judge, would understand the language to mean. The accompanying judgment is admissible and may be an authoritative statement of the circumstances and issues addressed by the order. The Tribunal applied the principles in San Souci Ltd v VRL Services Ltd [2012] UKPC 6.
3. The Court of Appeal’s reference to addressing the apportionment in the manner stated in the earlier First-tier Tribunal decision meant that the First-tier Tribunal was to apply the methodology it had already determined. That methodology was a pro-rata allocation of the developer’s residual profit across the whole economic package, including the freehold acquisition, using the relevant qualifying and non-qualifying expenditure. The remitter left the precise calculation to the First-tier Tribunal, not the underlying methodology.
4. The earlier First-tier Tribunal decision had determined the methodology. The parties had contested the basis of the calculation, including whether land costs and other components should be included. References to further analysis concerned the identification of qualifying legal costs and the resulting mathematical computation. The statutory framework for tax appeals was consistent with leaving the final quantum to the parties, subject to a further hearing if agreement could not be reached.
5. The Tribunal accepted that a First-tier Tribunal may reopen an issue before a final decision disposing of the appeal has been issued. However, that jurisdiction did not justify a second hearing on a methodology already determined. Larner v Warrington [1985] STC 442 was distinguishable because it concerned an intervening binding decision affecting an issue that had not been finally determined. The principle of finality in litigation, reflected in AIC Limited v Federal Airports Authority of Nigeria [2022] UKSC 16, prevented LLH from taking a second opportunity to advance the point.
6. The remitter therefore required the parties to calculate the non-qualifying proportion of the residual amount by applying the methodology identified in the earlier First-tier Tribunal decision, taking account of the settled position on the qualifying items. The First-tier Tribunal’s directions stood.

• Upper Tribunal (Tax and Chancery Chamber): appeal against [2024] UKFTT 001104 (TC) dismissed. The remitter was confined to calculating the apportionment using the methodology already determined.
• Court of Appeal: in [2023] EWCA Civ 362, allowed HMRC’s appeal on the residual amount and remitted the issue of correct apportionment to the First-tier Tribunal.
• Upper Tribunal: the earlier decision was reported at [2021] UKUT 147 (TCC).
• First-tier Tribunal: the original decision was reported at [2019] UKFTT 212 (TC).