Strauss Phillips & Co Ltd v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal is granted where a proposed point of law has a realistic prospect of success or, exceptionally, there is another good reason. A challenge to fact-finding or evaluation must identify the challenged finding, its significance and the relevant evidence, and explain why the tribunal could not reasonably reach it. A general disagreement with the evidence or the tribunal’s evaluative conclusions is insufficient. Where the tribunal identified the applicable costs tests, applied them to supported findings and gave reasons for its causal and summary assessment, disagreement with that assessment does not disclose an arguable error of law.

Strauss Phillips & Co Ltd, an accountancy firm, represented Gary Elden in his tax appeal before the First-tier Tribunal (Tax Chamber). The FTT ordered the firm to pay HMRC £13,068.42 in costs for wasted costs and unreasonable conduct in the proceedings, but refused HMRC’s costs application against Mr Elden. The substantive tax appeal remained ongoing.

After the FTT refused permission to appeal, the firm’s paper application to the Upper Tribunal was also refused. It renewed its application for permission at an oral hearing, relying on eight grounds alleging errors in the FTT’s evidential basis, application of the costs tests, causation, costs assessment and procedural fairness. The question was whether any ground disclosed an arguable error of law or another compelling reason to grant permission.

Permission to appeal was refused on all eight grounds. The proposed grounds had no realistic prospect of success and disclosed no arguable error of law. There was no other compelling reason to grant permission.

1. Under section 11 of the Tribunals, Courts and Enforcement Act 2007, an appeal from the FTT lies only on a point of law. Applying the permission threshold in Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538, permission requires a realistic, rather than fanciful, prospect of success or, exceptionally, another good reason.

2. A challenge to fact-finding must do more than disagree with the FTT’s evaluation. The applicant must identify the finding, show its significance, identify the relevant evidence and demonstrate that the FTT was not entitled to make the finding. The Tribunal applied Edwards v Bairstow [1956] AC 14 (HL) and the approach in Georgiou v Customs and Excise Commissioners [1996] STC 463. The FTT had identified evidence supporting its findings. Some adverse findings were accepted or left unchallenged, and the applicant’s arguments about the remaining findings did not show that they were irrational or unsupported.

3. The FTT had identified and applied the relevant standards for wasted costs and unreasonable conduct. The applicant’s challenge amounted to disagreement with its evaluation of the conduct and the resulting costs. The Tribunal found no arguable error in the FTT’s conclusions that inaccurate case summaries prepared using AI had caused HMRC to incur review costs, and that repeated procedural failings had caused further costs.

4. The FTT’s summary assessment did not require a line-by-line review. It excluded costs attributed to ordinary case management and bundle preparation, then assessed the remaining recoverable costs at 80%. The Tribunal held that the FTT had given a rational and proportionate basis for that assessment and had not used costs as a backdoor means of shifting the costs of litigation.

5. The costs application had been decided on the papers after the firm had opportunities to make written representations. The firm had not requested an oral hearing. It also had an oral hearing before the Upper Tribunal on its renewed permission application. The costs decision determined only the costs issue and did not decide any separate disciplinary or regulatory question.

1. Upper Tribunal (Tax and Chancery Chamber): On renewal following an oral hearing, refused permission to appeal on all eight grounds on 9 October 2026.
2. Upper Tribunal (Tax and Chancery Chamber), paper decision: Refused permission to appeal on 24 August 2026. The firm renewed its application for an oral hearing.
3. First-tier Tribunal (Tax Chamber): In its Costs Decision released on 15 April 2026, ordered the firm to pay HMRC £13,068.42 and refused HMRC’s costs application against Mr Elden. The FTT refused permission to appeal on 2 July 2026. The related strike-out decision, Mr Gary Elden v Revenue and Customs [2026] UKFTT 41 (TC), was not appealed; Mr Elden’s substantive tax appeal remained ongoing.