York SD Limited & Ors vThe Commissioners for HMRC

Permission to appeal requires an arguable material error of law with a realistic prospect of success. A challenge to factual findings must meet the narrow standard associated with Edwards v Bairstow [1956] AC 14: no evidence supports the finding, the only evidence contradicts it, or the only reasonable conclusion contradicts it. The challenger must identify the finding, its significance, the relevant evidence and why the tribunal could not make it; a general complaint about evidential weight is insufficient. At the permission stage, the Upper Tribunal may need to consult witness transcripts. Credibility findings and significant weight do not make every recited statement a finding of fact. Here, the factual challenge failed, but an allegation that the First-tier Tribunal had not considered each appellant’s distinct circumstances was arguable for the appellants other than York.

Six companies sought enterprise investment scheme relief on shares issued to fund solar projects. HMRC withdrew the relief, and the First-tier Tribunal dismissed the companies’ appeals. The companies had installed single rooftop solar panels in the UK and planned larger solar projects through wholly owned subsidiaries in Spain and Portugal. The FTT found, among other things, that the rooftop activity was not profit-seeking and was fundamentally different from the subsidiaries’ projects.

The FTT granted permission to appeal on Grounds 2–4, which challenged the legal test for commencing a trade, but refused permission on Ground 1. The Upper Tribunal had refused the renewed Ground 1 application on paper and then heard the companies’ oral applications. Ground 1A challenged findings of fact; Ground 1B argued that the FTT had considered York’s circumstances but failed to assess the other companies’ distinct facts. The question was whether either ground disclosed an arguable material error of law with a realistic prospect of success.

1. The Upper Tribunal refused permission on Ground 1A and granted permission on Ground 1B to the appellants other than York. Under section 11(1) of the Tribunals, Courts and Enforcement Act 2007, permission was appropriate only if a ground was arguable, with a realistic prospect of success, that the FTT had made a material error of law.

2. A challenge to findings of fact faces a high threshold. The circumstances identified in Edwards v Bairstow [1956] AC 14 and summarised in HM Revenue & Customs v Anna Cook [2021] UKUT 15 (TCC) are where there was no evidence supporting the finding, the only evidence contradicted it, or the only reasonable conclusion contradicted it. Georgiou (t/a Marios Chippery) v. Customs and Excise Comrs [1996] STC 463 further requires the challenger to identify the finding, explain its significance, identify the relevant evidence and show why the tribunal was not entitled to make that finding. A roving selection of evidence and a general assertion that the result was against its weight do not suffice.

3. The appellants identified challenged findings, and the Upper Tribunal accepted that they were significant. But they did not identify all the evidence relevant to those findings or show that the FTT was not entitled to reach them. At the permission stage, it could be necessary to consult witness transcripts where relevant oral evidence was not set out in the FTT’s decision. The FTT’s finding that witnesses were credible and that their evidence deserved significant weight did not mean it accepted every part of their accounts as fact.

4. The FTT had evidence supporting its findings about the rooftop panels’ limited revenue, cost and purpose. An intention to meet the requirements of EIS relief did not compel a finding that those requirements had in fact been met; the significance of that motivation was for the FTT. The observation in Inland Revenue Commissioners v Brebner [1967] 2 AC 18, relied on by analogy, did not establish otherwise. Nor did the FTT impose a separate requirement that a serious commercial operator would pursue the model: it used commercial viability as evidence when assessing the statutory requirement in section 189(1)(a) of the Income Tax Act 2007.

5. The FTT’s primary factual findings preceded its consideration of when a trade commences. Although the approach to commencement in Putney Power Limited v HM Revenue & Customs [2026] UKUT 105 (TCC) was challenged under Grounds 2–4, there was no suggestion that the later legal test had tainted the earlier findings. Ground 1A therefore had no realistic prospect of success.

6. Ground 1B was realistically arguable. The decision contained indications that the FTT had considered the other appellants’ circumstances, but it was not clear that it had done so separately. In particular, the decision did not appear to address EPC contracts entered into by Warwick and Cardiff before the QBA deadline. Their relevance might depend on the legal test challenged under Grounds 2–4, but that overlap did not remove the arguability of Ground 1B.

• Upper Tribunal (Tax and Chancery Chamber): Following an oral hearing on 9 June 2026, refused permission on Ground 1A and granted permission on Ground 1B to the appellants other than York.
• Upper Tribunal (Tax and Chancery Chamber): A paper decision issued on 5 March 2026 refused the renewed application on Ground 1.
• First-tier Tribunal (Tax Chamber): Dismissed the companies’ appeals in its decision released on 16 July 2025. On 6 November 2025 it granted permission on Grounds 2–4 and refused permission on Ground 1.