John Smith v The Commissioners for HMRC

Permission to appeal to the Upper Tribunal requires an arguable error of law that was material to the First-tier Tribunal’s decision; the argument must have a realistic prospect of success. Appellate intervention in case-management decisions and factual findings is limited, and a tribunal need not discuss every item of evidence if its reasons explain the findings and address the material issues. Applications to admit new evidence require consideration of the Ladd v Marshall criteria alongside the overriding objective, without treating those criteria as rigid rules. Here, none of the grounds disclosed an arguable material error. Permission was refused, and all grounds were certified totally without merit.

John Smith appealed against tax and VAT assessments arising from HMRC’s case that he continued to operate and beneficially own a business after its purported sale in March 2003. The assessments covered earlier and later tax years and were based in part on a continuity approach. The First-tier Tribunal (Tax Chamber) dismissed the appeals against the discovery and VAT assessments, revised turnover and expense figures, and allowed the appeal against certain penalties for failure to file returns.

The First-tier Tribunal refused permission to appeal on 21 grounds. Smith then applied to the Upper Tribunal, also seeking to introduce new documents. The central question was whether any ground disclosed an arguable error of law material to the First-tier Tribunal’s decision.

1. Permission and new evidence. Permission to appeal was refused on every ground. The Upper Tribunal admitted the Loan Documents only to assess whether they supported an arguable error of law. Their possible relevance to credibility, and the circumstances in which the need for them became apparent, made admission consistent with the overriding objective. The account 6645 bank statements were refused: Smith had not shown that reasonable diligence could not have obtained them earlier, and their likely influence on the result was uncertain.
2. Appellate review. Case-management decisions should not be disturbed merely because an appellate tribunal might have decided differently. Intervention is justified only where the decision falls outside the generous ambit of the First-tier Tribunal’s discretion. Findings of fact and evaluations of evidence attract similar restraint. The appellate tribunal must avoid reassessing isolated items of evidence in place of the tribunal that heard the whole case. The Upper Tribunal applied the approaches in HMRC v Ingenious Games LLP, FAGE UK Ltd v Chobani UK Ltd and Volpi v Volpi.
3. Reasons and evidence. The First-tier Tribunal had to explain its conclusions and its treatment of evidence capable of supporting a different conclusion, but it was not required to address every page or document. Read as a whole, its reasoning on ownership, discovery, quantum, credibility and procedural fairness was sufficient. The Upper Tribunal found no arguable error in its treatment of the absent assessing officer’s evidence, the late hearing bundle, the applicant’s illness, or the cumulative fairness and bias grounds.
4. Discovery and conduct. The relevant discovery inquiry concerned the assessing officer’s own state of mind and whether it was objectively reasonable. A second officer could make a discovery even if the information had previously been available to another officer: Tooth. The First-tier Tribunal’s findings on deliberate conduct, dishonesty and fraud disclosed no arguable error. Its mistaken cross-reference was immaterial.
5. The Upper Tribunal certified all grounds as totally without merit under the The Tribunal Procedure (Upper Tribunal) Rules 2008. Smith may not request reconsideration at a hearing.

1. Upper Tribunal (Tax and Chancery Chamber) — Permission to appeal refused on all grounds. All grounds were certified totally without merit.
2. First-tier Tribunal (Tax Chamber) — In decision TC/2015/06427, released on 6 May 2026, the Tribunal dismissed the appeals against the discovery and VAT assessments, revised the relevant turnover and expense figures, and allowed the appeals against certain failure-to-file penalties. It refused permission to appeal on 23 July 2026.