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Fife Resources: jurisdiction of the Scottish FTT

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On 9 August 2018, the First-tier for Scotland Tax Chamber issued its most recent decision in the case of Fife Resources Solutions LLP v Revenue Scotland [2018] FTSTC 1. This case is of interest due to the procedural matters that it discussed.

The sequence of events is as follows. Two assessment notices were issued to the appellant in January 2017 covering two Scottish landfill tax (SLfT) quarters: April-June and July-September 2015. The appellant asked for these assessments to be reviewed under s 234 of the Revenue Scotland and Tax Powers Act (RSTPA) 2014.

Section 239 of that Act requires a review to be completed within 45 days or such other period as may be agreed, which was the case here where a longer period was initially agreed. Nevertheless, the appellant lodged an appeal before the review was completed, and Revenue Scotland subsequently withdrew and then cancelled the assessments due to an error in them. Following this, a closure notice was issued by Revenue Scotland in relation to the second SLfT period but the enquiry for April-June remained open. In due course, further closure, assessment and penalty notices for the April-June quarter were issued which, at the time of this decision, were the subject of a review request.

The appellant wanted their original appeal to the tribunal to continue (in particular to address the issue of all their costs incurred being paid by Revenue Scotland) and, after a number of tribunal instructions and questions being issued, both sides put in their submissions, and the case was heard as a paper case.

What issues had to be decided?

This case did not address any Scottish landfill tax matters because a number of procedural questions arose:

  • Was there an appealable decision – or could the assessment not be appealed until the review was completed, i.e. can there be an appeal made when there are ongoing matters?
  • If there was an appealable decision, but Revenue Scotland then withdrew the assessment did that mean there was no longer an appealable decision? and
  • Did the tribunal have the jurisdiction to hear the case?

In addressing these questions, it was held that a decision may not be appealed when the taxpayer has asked for a review and it has not been concluded or treated as concluded (RSTPA 2014 s 241(4)). The legislation is clear on this. The decision also discusses the second point, whether an appeal could be heard when the underlying assessment had been withdrawn. The discussion draws a comparison between this case and both Rasam Gayatri Silks Ltd v HMRC [2010] UKFTT 50 (TC) and GE International Inc v HMRC [2010] UKFTT 343 (TC). This is a reminder that UK jurisprudence may be relevant in Scottish devolved tax cases. The judge noted that these cases are not binding on the Scottish tribunal (and FTT decisions are not binding), in this case they were nonetheless instructive because of the structural similarity of some of the rules of procedure vis a vis the tribunal rules.

The tribunal found it did not have the jurisdiction to determine the appeal because it was made prematurely. The decision also notes that if the appeal had not been premature, the question of whether the tribunal could have jurisdiction remains live where the disputed decision is withdrawn after the appeal is initiated. The question of quantum of costs remained outstanding but the tribunal did not consider that it should make an order on this. The case suggests some frustrations amongst the parties but also provides useful guidance on the procedures required by the RSTPA 2014. 

ICAS tax team

Issue: 1416
Categories: In brief