Ketan Patel v The Commissioners for HMRC

An appeal from the First-tier Tribunal to the Upper Tribunal lies only on a point of law. Permission is granted where there is a realistic prospect of success or, exceptionally, another compelling reason. On the facts, using the presumption of continuity did not make the assessing officer’s belief unreasonable, and use of the presumption was not itself an error of law. Although a tribunal may direct further written submissions, deciding a significant dispute on the papers can be an arguable error where a litigant in person must answer extensive submissions. This decision determined only which grounds could proceed to appeal; it did not decide the merits of those grounds.

The First-tier Tribunal refused Ketan Patel’s appeal against tax assessments and closure notices issued by HMRC. After the FTT refused permission to appeal, Mr Patel applied to the Upper Tribunal. Permission was first granted on some grounds and limited on others. At an oral reconsideration, the parties clarified that HMRC’s requested figures concerned profits rather than tax, and the grounds were amended. The Upper Tribunal considered whether the remaining challenges, including the FTT’s treatment of assessments, written submissions and bank statement evidence, had a sufficient prospect of success to proceed.

1. The Upper Tribunal granted permission on Grounds 2, 3 as amended, 5, 7, 8 and 9. It refused permission on Grounds 1 and 6. Ground 4 fell away because it was encompassed by other grounds. This was a permission decision, not a determination of the substantive appeal.

2. An appeal from the FTT lies only on a point of law under section 11 of the Tribunals, Courts and Enforcement Act 2007. Permission is granted where an appeal has a realistic prospect of success, or exceptionally where another compelling reason exists. The Upper Tribunal applied that test to each ground, following the approach in Spirit Motor Company v HMRC [2024] UKUT 00230 (TCC).

3. Ground 1 had no reasonable prospect of success. The FTT found that the assessing officer believed Mr Patel had received undeclared income and that her belief in an insufficiency of tax was reasonable. The officer had examined bank statements for other years and invited Mr Patel to provide further evidence for the later years. Use of the presumption of continuity did not, on those facts, make the belief unreasonable. Lowe v HMRC [2024] UKFTT 826 (TC) was materially different: the officer there did not address discovery, its date or its basis in the witness statement, and did not attend the hearing.

4. Ground 6 also had no reasonable prospect of success. HMRC could use the presumption of continuity, although the approach carried the risk that evidence might show a different position in a particular accounting period. The Upper Tribunal relied on Stirling Jewellers v HMRC [2020] UKUT 245 (TCC). The FTT’s use of “principle” rather than “presumption” was not, without more, a material error. The later years’ base year was selected because later bank statements and evidence of different income had not been provided.

5. The remaining grounds were arguable. They concerned the FTT’s failure to make findings on the validity of certain enquiries or closure notices; its burden-of-proof approach and possible use of the wrong statutory power after HMRC clarified that the figures related to profits; and whether it was fair to decide significant issues through extensive written submissions and without ensuring that Mr Patel received and had time to consider the bank statement evidence. The Upper Tribunal did not determine whether the FTT had in fact erred on those issues.

1. Upper Tribunal (oral reconsideration): Permission granted on Grounds 2, 3 as amended, 5, 7, 8 and 9; refused on Grounds 1 and 6. Ground 4 fell away. [2026] UKUT 271 (TCC)
2. Upper Tribunal (paper decision): Permission had been granted on Grounds 3 and 5, with limited permission on Grounds 4 and 6 to the extent they overlapped with Ground 3.
3. First-tier Tribunal (Tax Chamber): The FTT refused Mr Patel’s appeal against the assessments and closure notices on 5 September 2025. The FTT judge refused permission to appeal on 13 November 2025.