Appeals and applications to the First-tier Tribunal and Upper Tribunal are both significantly affected by the coronavirus (Covid-19) pandemic. This guidance summarises the situation as at 12 May 2020. However, the position is not yet stable. The Ministry of Justice is providing regular updates and you are advised to check the judiciary website for the most up-to-date position. The Ministry of Justice page currently includes ‘pilot’ practice directions, announcements and guidance. These practice directions are described as ‘pilot’ because they have been introduced to deal with the problems caused to the tribunals by the coronavirus lockdown. They are expressed to last for six months, but may be amended or revoked at any time; they may also be extended.
This guidance deals with appeals to the First-tier Tribunal unless specific reference is made to the Upper Tribunal or to both tribunals. It only provides a summary, and you may need to take further advice in relation to any particular appeal position. Also, If the appeal is to the Scottish First-tier Tribunal, the procedure may not be the same as that set out here. You are advised to take specialist advice.
General approach
There are five general points that you should bear in mind:
You may find the general summary guidance for users of the First-tier Tribunal (bit.ly/2zvOZlG) and Upper Tribunal useful (bit.ly/2zqw6jR).
Making a new appeal to HMRC
You must first check whether the HMRC decision is appealable. Direct tax appeals must be made first to HMRC. With indirect tax decisions, a person can either accept the offer of an HMRC review, or appeal straight to the tribunal. In either case, there is a strict 30-day time limit. However, HMRC can accept a late appeal if there is a reasonable excuse (TMA 1970 s 49(3), (6); VATA 1994 ss 83E(2)(b), 83G(6)).
HMRC has given the following guidance: ‘If you or your business have been affected by coronavirus (Covid-19), HMRC will give you an extra 3 months to appeal any decision dated February 2020 or later. Send your appeal as soon as you can, and explain the delay is because of coronavirus.’
Note that this only applies to appeals made to HMRC. It does not apply where a person who decides to appeal an indirect tax decision directed to the tribunal (see ‘Making a new appeal to the FTT’ below).
There is no generic email address to which a new appeal can be made to HMRC. If you are unable to obtain an appropriate email address, perhaps from an HMRC officer, it may not be possible to make an electronic appeal to HMRC and any appeal may need to be made by post. You may find it difficult to notify the appeal to HMRC within the time limit (e.g. the decision letter was sent to your or the taxpayer’s work premises, which are closed, or you/the taxpayer are self-isolating).
If you appeal to HMRC after the extra three months, or cannot rely on that extended period because the reason for the delay is not related to coronavirus, HMRC may still accept that you have a reasonable excuse for making a late appeal.
If HMRC does not accept that you have a reasonable excuse, you will need to apply to the tribunal for permission to make a late appeal. As noted above, the senior president has already said that the tribunals will take into account the impact of coronavirus when considering any application for further time, and it is thus likely that a delay caused by coronavirus-related matters will result in the application being allowed, but you will also need to explain the extent of the delay and the reasons why it was more than the three months allowed by HMRC. In making its decision, the tribunal will consider all relevant circumstances including the reasons for the delay.
Making a new appeal to the FTT
You should ensure that the appeal is made using the online form on the Gov.uk website (see bit.ly/2SZH073), rather than downloading the appeal form and sending it by post. If it is not possible to use the online form, the paper form can be scanned and submitted to the tribunal via email (taxappeals@justice.gov.uk). Paper communication with the tribunal is to be avoided during the pandemic, as administrative staff will for the most part be working remotely.
Any emails sent to the tribunal should receive an automatic acknowledgement. If you do not receive an acknowledgement, it is suggested that you call or email the tribunal clerks to check that the email has not been blocked by the firewall or treated as junk mail. The email address is taxappeals@justice.gov.uk. You should put ‘new appeal’ and the appellant’s name in the header box for the email.
Time limit for making the appeal
There is a 30-day time limit for notifying an appeal to the tribunal after HMRC has carried out a statutory review. In VAT cases, there is also a 30-day time limit for appealing to the tribunal if the offer of an HMRC review is refused (TMA 1970 ss 49D, 49G; VATA 1994 s 83G).
The tribunal has emphasised that the 30-day deadline still applies, and that it is not covered by the ‘general stay’ or the ‘further general stay’ referred to in ‘Complex and standard appeals’ below. These stays apply to ‘proceedings’ before the tribunal. Until you have made the appeal, there are no proceedings, so the stay is not relevant.
If you are late because of the impact of coronavirus, the tribunal may give permission for the appeal to be made/notified late. However, the tribunal will consider all relevant circumstances (see Pilot practice direction on contingency arrangements, at bit.ly/2WlJLBN). Note that HMRC has said that it will not object to a late notification as long as:
(See HMRC’s guidance on appealing against a tax decision (bit.ly/35QHIIY) and against a penalty (bit.ly/2zxPlIc).
The decision as to whether to allow the appeal to be made/notified late is one for the tribunal to make, not HMRC. However, the tribunal will consider all relevant circumstances, and this is likely to include the lack of an objection from HMRC.
Categorisation of the appeal
Once the tribunal has received the appeal, it will be classified into one of four categories:
Default paper cases are so-called because they are automatically classified as paper cases without the parties making a request (so by default), and the ‘paper’ categorisation means there is no hearing; instead, the papers are given to a judge who decides the outcome and writes the decision. The process for a default paper case is at SI 2009/273, rule 26.
The president of the FTT has issued a new practice statement that will initially apply for six months, although it could be extended, amended or revoked depending on the coronavirus position. Under that new practice statement, the following cases will automatically be allocated to the ‘default paper’ category:
In the past, the threshold for default paper categorisation was £2,000. The benefit of the new higher threshold is that more cases can be decided without waiting for the end of the pandemic: it is quicker and easier to organise and decide a default paper case than an appeal which requires a hearing.
If the taxpayer’s case has been allocated as default paper, you should liaise with HMRC to ensure that the tribunal is provided with all relevant documents in an electronic format; where possible, that format is to be editable. This is presumably to make it easier for the judge to draft the decision in an efficient manner by citing evidence or arguments without having to retype the words. (See Updated guidance on the administration and conduct of proceedings at bit.ly/2STIbEW.)
As stated earlier, when sending documents by email, it is important to check the size of the files, as an email with attachments exceeding 25mb in total (in the case of the tribunal) or 10mb in total (in the case of HMRC) is likely to be rejected by the firewall. Any emails sent to the tribunal should receive an automatic acknowledgement. If this is not received, it is suggested that you call or email the tribunal clerks to check that the email has not been blocked by the firewall or treated as junk mail. The email address is taxappeals@justice.gov.uk. You should put ‘new appeal’ and the appellant’s name in the header box for the email.
Remember to think carefully about what factors are relevant to the taxpayer’s position and provide all the relevant evidence and arguments. Often in penalty cases, new facts and arguments are put forward at the hearing. In paper cases, there is no chance to do this. If all relevant material has not been provided with the grounds of appeal, make sure it is sent to the tribunal by way of reply to HMRC’s statement of case (SI 2009/273, rule 26).
A party who does not agree that the appeal should be decided as a default paper case can object by writing to the tribunal via an email sent to taxappeals@justice.gov.uk. If this happens, the tribunal rules say that the tribunal ‘must hold a hearing before determining the case’. In other words, the default paper categorisation will then be replaced by another categorisation (usually basic) (SI 2009/273, rule 26(7)).
An amendment to the tribunal rules, effective from 10 April 2020, provides that even if a party objects to the case being decided on the papers, the tribunal may nevertheless decide that it should be decided in that way. However, the tribunal can only take that step if all of the following conditions are satisfied:
(See SI 2009/273, rule 5A.)
This amendment to the tribunal rules is expressed to expire at the same time as the Coronavirus Act 2020, so on 24 March 2022, unless that date is either brought forward or extended (SI 2020/416, reg 1(2); Coronavirus Act 2020 ss 89, 90).
Complex and standard appeals
If the taxpayer appealed to the tribunal before 24 March 2020 and was told that the case had been classified as complex or standard, the appeal will normally be stayed until 30 June 2020. This is because the president of the FTT issued a ‘general stay’ on 24 March 2020 that was extended on 21 April 2020 by a ‘further general stay’. However, note the following points:
If your case is one of those affected by the general/further stay, you are likely to hear nothing about the appeal during this time, and it will not move forward.
However, in any particular case, the tribunal may decide that the appeal can be moved forward, and, if so, it will issue specific directions.
A party who objects to the case being stayed, perhaps because it is very urgent, can apply for the stay to be lifted. That might be the position for example where HMRC is threatening the taxpayer with bankruptcy.
Note that if the pandemic continues, the stay may be extended beyond 30 June 2020.
All other appeals
The tribunal president’s general stay issued on 24 March 2020 stayed all appeals received after that date until 21 April 2020. The further stay which followed only affected certain standard and complex appeals (see ‘Complex and standard appeals’ above).
All appeals other than those covered by the further stay are thus no longer stayed. As a result:
Hearing of appeals
Until further notice, there will be no hearings at which people are physically present, unless the president gives permission (see ‘Physical hearing before the end of the pandemic’ below). If the taxpayer’s hearing was listed to take place before 31 August 2020, you are likely to have already been informed that it has been cancelled.
The tribunal is considering how to hear those appeals. There are the following possibilities:
All of these are explained further below.
The judiciary is making good progress in hearing appeals by phone and video. A daily breakdown of the number of cases heard remotely in all courts and tribunals in England and Wales is available on the Gov.uk website (see bit.ly/2zytGQ6).
The tribunal is now publishing a list of cases which are to be heard in the following week (see bit.ly/3bp5LA7).
Paper hearing
The tribunal rules allow cases other than those categorised as default paper to be dealt with on the papers, without an oral hearing, if the parties consent. The tribunal may ask you if you agree to the appeal being dealt with in this way (see the Statement of conduct of business in the First-tier Tribunal at bit.ly/2WS1OyK; SI 2009/273, rule 29).
If you agree, you will be issued with specific directions to move the case forward so the appeal can be dealt with on the papers by a judge. You will need to liaise with HMRC to ensure that the tribunal is provided with all relevant documents in an electronic format; where possible, that format is also to be editable. Remember to think carefully about what factors are relevant to the taxpayer’s position and provide all the relevant evidence and arguments in good time. It is likely to be too late to do so after the judgment has been issued (see Updated guidance on the administration and conduct of proceedings).
As stated earlier, when sending documents by email, it is important to check the size of the files, as an email with attachments exceeding 25mb in total (in the case of the tribunal) or 10mb in total (in the case of HMRC) is likely to be rejected by the firewall. Any emails sent to the tribunal should receive an automatic acknowledgement. If this is not received, it is suggested that you call or email the tribunal clerks to check that the email has not been blocked by the firewall or treated as junk mail. The email address is taxappeals@justice.gov.uk. You should put ‘new appeal’ and the appellant’s name in the header box for the email.
If you disagree with the case being decided on the papers, consider whether the case is suitable for a phone or video hearing: see below.
Note that even if you disagree, the tribunal may nevertheless decide to go ahead in any event if all of the following conditions are satisfied:
(See SI 2009/273, rule 5A.)
This is a new rule which applies only for as long as the Coronavirus Act 2020 is in force. It is expected to expire on 24 March 2022, unless that date is either brought forward or extended (SI 2020/416, reg 1(2); Coronavirus Act 2020 ss 89, 90).
Phone/video hearing: general
The tribunal will contact you if it considers the case is suitable for a phone or video hearing. If you agree, you should liaise with HMRC to ensure that the tribunal is provided in advance with all relevant documents in an electronic format; where possible, that format is also to be editable. Remember the points made above regarding the total size of each email. You should ask HMRC to acknowledge each email to ensure you have a record that all the emails have been received (see Updated guidance on the administration and conduct of proceedings).
If a case is listed for a phone/video hearing, the word ‘hearing’ in the tribunal rules applies to that hearing (Pilot practice direction on contingency arrangements, para 7).
Phone hearings are likely to be conducted using BT-MeetMe, and so should be simple for taxpayers and their advisers: no particular special requirements or technologies are required. It will be possible for a number of different people to be on the call, including witnesses.
Video hearings are likely to be conducted using the tribunal’s existing video-hearing technology, but Cloud Video Platform and Skype for Business may also be used. You will be asked if you, the taxpayer and any witnesses can engage with that methodology. You will need to contact all those involved, and ensure that they have access to the relevant technology (i.e. computer with internet access, webcam and microphone) and are sufficiently competent so that they can use it for the hearing. Electronic bundles are likely to be required, and thus two screens will be needed, one to see the bundle and one to participate in the hearing. The second screen can be a tablet or similar. It may be necessary for participants to download applications in advance of the hearing to support the video hearing (see the guidance HMCTS telephone and video hearings during coronavirus outbreak at bit.ly/2WKolx7).
Third parties, including journalists, may ask to attend the hearing by joining the audio or video call, in the same way as they could have attended an oral hearing in person. The relevant practice direction says that: ‘Where a media representative is able to access proceedings remotely while those proceedings are taking place, the proceedings will constitute a public hearing for the purposes of the relevant Chamber’s procedure rules’ (Pilot practice direction on video/audio hearings, para 5).
For practical details of how to join a phone or video hearing, see the guidance on the Gov.uk website (see bit.ly/2Z30eg9). Participants will need a quiet space where they will not be disturbed during the hearing.
Phone/video hearing: failure to attend
If the taxpayer is unable to attend the listed video/audio hearing, an application to adjourn must be made, with reasons. This can be simply via an email to taxappeals@justice.gov.uk, but you will need to explain why you or the taxpayer cannot attend and attach any relevant evidence. Be sure to put your tribunal reference number and the date of the hearing in the header box of the email, and, if the hearing is within the next few days, put ‘URGENT’ in the header box as well.
If a party fails to attend a phone/video hearing without making an application for it to be adjourned, wins the appeal and then applies for the decision to be set aside on the basis of non-attendance, the tribunal is unlikely to allow that application (SI 2009/273, rule 38(2)(d); Pilot practice direction on contingency arrangements at para 9).
Thus where, for example, the appellant wins on one ground but considers that another ground should also have been successful, it is unlikely that the decision will be set aside.
There is no similar adverse presumption if a party:
Nevertheless, you will need to show that it is in the interests of justice to set aside the decision, despite the failure to attend and the failure to apply for an adjournment (SI 2009/273, rule 38(2)(d)). For an example of the tribunal considering that rule, see Rashidi v HMRC [2016] UKFTT 357 (TC).
Phone/video hearing: recording
The normal position in the tribunal is that hearings must be held in public, with certain very limited exceptions, such as to protect national security (SI 2009/273, rule 32(1)).
An amendment to the tribunal rules, effective from 10 April 2020, allows a hearing to be in private if all of the following conditions are met:
(See SI 2009/273, rule 32(2A).)
This amendment to the tribunal rules is expressed to expire at the same time as the Coronavirus Act 2020, so on 24 March 2022, unless that date is either brought forward or extended (SI 2020/416, reg 1(2); Coronavirus Act 2020 ss 89, 90).
To facilitate the continuation of the normal position that hearings are in public, the Coronavirus Act 2020 provides that the tribunals may direct that the hearing is broadcast, or that it be recorded (SI 2009/273, rule 31; Coronavirus Act 2020 s 55, Sch 25; TCEA 2007 ss 29ZA–29ZD).
There is no current expectation that FTT hearings will be broadcast. However, they may be recorded, and this must happen unless it is not practicable. This is the case even if a media representative was able to access the proceedings remotely while they were taking place. The only reason why a phone/video hearing will not be recorded is that it is not practicable to do so (SI 2009/273, rule 32A; see also Pilot practice direction on video/audio hearings).
If the hearing is recorded, the recording will be available to the parties on request. It will also be available to third parties (see Updated guidance on the administration and conduct of proceedings; Pilot practice direction on video/audio hearings).
The fact that the recording can be made available to any person after the hearing may have implications for privacy and confidentiality. In the past, most hearings were not attended by anyone other than the parties, although they were open to the public. Now any person can ask for and obtain a recording of the hearing after the event.
The Coronavirus Act 2020 also sets out criminal penalties to be levied on those who make an unauthorised recording, or an unauthorised transmission of the hearing (TCEA 2007 ss 29ZB, 29ZC).
Objecting to a phone/video hearing
If you consider that a phone/video hearing is not in the interests of justice, you should inform the tribunal as soon as possible and give your reasons. This can be simply via an email to taxappeals@justice.gov.uk, but you will need to explain your reasons and attach any relevant evidence. Be sure to put your tribunal reference number and the date of the hearing in the header box of the email, and, if the hearing is within the next few days, put ‘URGENT’ in the header box as well.
Possible reasons might include a witness being unable to access video technology (but consider then whether an audio hearing might be possible) or the length/complexity of the hearing, the need to have an interpreter, and/or the extent of the disputed evidence and cross-examination (see the message from the Lord Chief Justice, Master of the Rolls and President of the Family Division, at bit.ly/2xSjW2K). However, note that both the Supreme Court and Court of Appeal have conducted video hearings since the beginning of the coronavirus pandemic by reference to the similar position in the civil courts. In April 2020, the High Court in One Blackfriars Ltd (in liquidation) [2020] EWHC 845 (Ch) refused an application to adjourn a five-week trial, and explained the reasons why.
Objections on the basis that the general public may be able to obtain copies of the recording are unlikely to succeed.
Physical hearing before the end of the pandemic
Although the normal position is that there will be no physical hearings at which parties are present for the foreseeable future, there may be exceptional cases. If you consider that the taxpayer’s case (a) cannot be dealt with on the papers, by phone or by video, and (b) cannot wait until after the end of the coronavirus lockdown, you must apply to the president of the tribunal, setting out your reasons. His permission (or that of his delegate) is required before a live hearing can take place (see Updated guidance for users on the administration and conduct of proceedings).
There is specific guidance on social distancing and other measures if an oral hearing does take place (see Guidance for tribunal judges and members: Covid-19 measures, dated 23 March 2020).
Physical hearing in the future
Cases which cannot be dealt with on paper, by video or by audio because it is not in the interests of justice, and cases which cannot be dealt with because of insufficient capacity in the tribunal, will be relisted for an oral hearing as soon as possible after the end of the coronavirus lockdown (see Updated guidance for users on the administration and conduct of proceedings).
If you have an appeal which has been listed for a hearing well into the future, the tribunal is unlikely to change those arrangements at this stage, in the hope that the appeal can proceed as planned.
Triage
The Pilot practice direction on contingency arrangements says that a tribunal may ‘triage’ cases, and it sets out a possible procedure. There is nothing currently to suggest that the FTT will use that process.
Appealing a tribunal decision
If your appeal has already been heard by the tribunal, and you received a written judgment before 24 March 2020, the tribunal rules provide for specific time limits in relation to the next stage. These are normally set out at the end of the judgment.
The time limits in the rules are:
Those time limits were extended by the general stay until 21 April 2020, but they have now begun to run again. The same is true of the 28-day time limit for applying for a decision to be set aside. The further stay that applies to certain complex and standard cases does not extend these time limits (SI 2009/273, rule 38(3)).
Be very careful not to miss the new time limits. Although it is possible for the FTT to allow a permission to appeal application to be made after the time limit if you have good reasons for being late (which may include coronavirus-related matters), the tribunal may decide that your reasons are not sufficient.
If the judgment in your case was issued after 24 March 2020, it was not covered by the general stay. Check the final paragraph of the judgment carefully: the judge may have granted a longer time period because of the coronavirus. Otherwise, you must comply with the time limits set by the tribunal rules and referred to at the end of the judgment.
The Upper Tribunal
The position for appeals currently before the Upper Tribunal is set out at the judiciary website (see bit.ly/2SXw75E).
This should be read together with the Pilot practice direction on video/audio hearings and the amendments to the Upper Tribunal rules in relation to video/audio hearings. The latter are essentially the same as the amendments to the FTT rules (new SI 2008/2698, rules 5A and 37A).
Judicial review
There is a strict time limit for judicial review. A claim must be made promptly, and in any event, no later than three months after the grounds to make a claim arose (Civil Procedure Rule 54.5; HMRC’s Appeals reviews and tribunals guidance at ARTG12040).
In accordance with the protocol, the first step in a judicial review case is normally to send a pre-action letter to the person who made the decision you are challenging. The purpose of a pre-action letter is to set out the grounds of your appeal and to invite settlement, rather than going straight to the court. You must follow the format for the pre-action letter set out in the civil procedure rules (see Pre-action protocol for judicial review at bit.ly/2YSUntz; ARTG12030–ARTG12040).
Usually, a copy of the pre-action letter must be sent to the HMRC Solicitor’s Office by post. However, during the coronavirus lockdown, pre-action letters should be sent by email to preactionletters@hmrc.gov.uk. The letter should be in a common format, such as PDF or Microsoft Word, and the attachments should not exceed 10mb in total. Unless requested to do so, do not send a hard copy duplicate.
This email address is for pre-action letters only. Any other correspondence sent to that email address will be deleted unread. Once the case has been allocated to an HMRC lawyer, all subsequent correspondence should be sent to their HMRC email address (see HMRC’s press release, dated 9 April 2020). n
For further Tolley®Guidance on Covid-19 matters, see covid19.tolley.co.uk.
Appeals and applications to the First-tier Tribunal and Upper Tribunal are both significantly affected by the coronavirus (Covid-19) pandemic. This guidance summarises the situation as at 12 May 2020. However, the position is not yet stable. The Ministry of Justice is providing regular updates and you are advised to check the judiciary website for the most up-to-date position. The Ministry of Justice page currently includes ‘pilot’ practice directions, announcements and guidance. These practice directions are described as ‘pilot’ because they have been introduced to deal with the problems caused to the tribunals by the coronavirus lockdown. They are expressed to last for six months, but may be amended or revoked at any time; they may also be extended.
This guidance deals with appeals to the First-tier Tribunal unless specific reference is made to the Upper Tribunal or to both tribunals. It only provides a summary, and you may need to take further advice in relation to any particular appeal position. Also, If the appeal is to the Scottish First-tier Tribunal, the procedure may not be the same as that set out here. You are advised to take specialist advice.
General approach
There are five general points that you should bear in mind:
You may find the general summary guidance for users of the First-tier Tribunal (bit.ly/2zvOZlG) and Upper Tribunal useful (bit.ly/2zqw6jR).
Making a new appeal to HMRC
You must first check whether the HMRC decision is appealable. Direct tax appeals must be made first to HMRC. With indirect tax decisions, a person can either accept the offer of an HMRC review, or appeal straight to the tribunal. In either case, there is a strict 30-day time limit. However, HMRC can accept a late appeal if there is a reasonable excuse (TMA 1970 s 49(3), (6); VATA 1994 ss 83E(2)(b), 83G(6)).
HMRC has given the following guidance: ‘If you or your business have been affected by coronavirus (Covid-19), HMRC will give you an extra 3 months to appeal any decision dated February 2020 or later. Send your appeal as soon as you can, and explain the delay is because of coronavirus.’
Note that this only applies to appeals made to HMRC. It does not apply where a person who decides to appeal an indirect tax decision directed to the tribunal (see ‘Making a new appeal to the FTT’ below).
There is no generic email address to which a new appeal can be made to HMRC. If you are unable to obtain an appropriate email address, perhaps from an HMRC officer, it may not be possible to make an electronic appeal to HMRC and any appeal may need to be made by post. You may find it difficult to notify the appeal to HMRC within the time limit (e.g. the decision letter was sent to your or the taxpayer’s work premises, which are closed, or you/the taxpayer are self-isolating).
If you appeal to HMRC after the extra three months, or cannot rely on that extended period because the reason for the delay is not related to coronavirus, HMRC may still accept that you have a reasonable excuse for making a late appeal.
If HMRC does not accept that you have a reasonable excuse, you will need to apply to the tribunal for permission to make a late appeal. As noted above, the senior president has already said that the tribunals will take into account the impact of coronavirus when considering any application for further time, and it is thus likely that a delay caused by coronavirus-related matters will result in the application being allowed, but you will also need to explain the extent of the delay and the reasons why it was more than the three months allowed by HMRC. In making its decision, the tribunal will consider all relevant circumstances including the reasons for the delay.
Making a new appeal to the FTT
You should ensure that the appeal is made using the online form on the Gov.uk website (see bit.ly/2SZH073), rather than downloading the appeal form and sending it by post. If it is not possible to use the online form, the paper form can be scanned and submitted to the tribunal via email (taxappeals@justice.gov.uk). Paper communication with the tribunal is to be avoided during the pandemic, as administrative staff will for the most part be working remotely.
Any emails sent to the tribunal should receive an automatic acknowledgement. If you do not receive an acknowledgement, it is suggested that you call or email the tribunal clerks to check that the email has not been blocked by the firewall or treated as junk mail. The email address is taxappeals@justice.gov.uk. You should put ‘new appeal’ and the appellant’s name in the header box for the email.
Time limit for making the appeal
There is a 30-day time limit for notifying an appeal to the tribunal after HMRC has carried out a statutory review. In VAT cases, there is also a 30-day time limit for appealing to the tribunal if the offer of an HMRC review is refused (TMA 1970 ss 49D, 49G; VATA 1994 s 83G).
The tribunal has emphasised that the 30-day deadline still applies, and that it is not covered by the ‘general stay’ or the ‘further general stay’ referred to in ‘Complex and standard appeals’ below. These stays apply to ‘proceedings’ before the tribunal. Until you have made the appeal, there are no proceedings, so the stay is not relevant.
If you are late because of the impact of coronavirus, the tribunal may give permission for the appeal to be made/notified late. However, the tribunal will consider all relevant circumstances (see Pilot practice direction on contingency arrangements, at bit.ly/2WlJLBN). Note that HMRC has said that it will not object to a late notification as long as:
(See HMRC’s guidance on appealing against a tax decision (bit.ly/35QHIIY) and against a penalty (bit.ly/2zxPlIc).
The decision as to whether to allow the appeal to be made/notified late is one for the tribunal to make, not HMRC. However, the tribunal will consider all relevant circumstances, and this is likely to include the lack of an objection from HMRC.
Categorisation of the appeal
Once the tribunal has received the appeal, it will be classified into one of four categories:
Default paper cases are so-called because they are automatically classified as paper cases without the parties making a request (so by default), and the ‘paper’ categorisation means there is no hearing; instead, the papers are given to a judge who decides the outcome and writes the decision. The process for a default paper case is at SI 2009/273, rule 26.
The president of the FTT has issued a new practice statement that will initially apply for six months, although it could be extended, amended or revoked depending on the coronavirus position. Under that new practice statement, the following cases will automatically be allocated to the ‘default paper’ category:
In the past, the threshold for default paper categorisation was £2,000. The benefit of the new higher threshold is that more cases can be decided without waiting for the end of the pandemic: it is quicker and easier to organise and decide a default paper case than an appeal which requires a hearing.
If the taxpayer’s case has been allocated as default paper, you should liaise with HMRC to ensure that the tribunal is provided with all relevant documents in an electronic format; where possible, that format is to be editable. This is presumably to make it easier for the judge to draft the decision in an efficient manner by citing evidence or arguments without having to retype the words. (See Updated guidance on the administration and conduct of proceedings at bit.ly/2STIbEW.)
As stated earlier, when sending documents by email, it is important to check the size of the files, as an email with attachments exceeding 25mb in total (in the case of the tribunal) or 10mb in total (in the case of HMRC) is likely to be rejected by the firewall. Any emails sent to the tribunal should receive an automatic acknowledgement. If this is not received, it is suggested that you call or email the tribunal clerks to check that the email has not been blocked by the firewall or treated as junk mail. The email address is taxappeals@justice.gov.uk. You should put ‘new appeal’ and the appellant’s name in the header box for the email.
Remember to think carefully about what factors are relevant to the taxpayer’s position and provide all the relevant evidence and arguments. Often in penalty cases, new facts and arguments are put forward at the hearing. In paper cases, there is no chance to do this. If all relevant material has not been provided with the grounds of appeal, make sure it is sent to the tribunal by way of reply to HMRC’s statement of case (SI 2009/273, rule 26).
A party who does not agree that the appeal should be decided as a default paper case can object by writing to the tribunal via an email sent to taxappeals@justice.gov.uk. If this happens, the tribunal rules say that the tribunal ‘must hold a hearing before determining the case’. In other words, the default paper categorisation will then be replaced by another categorisation (usually basic) (SI 2009/273, rule 26(7)).
An amendment to the tribunal rules, effective from 10 April 2020, provides that even if a party objects to the case being decided on the papers, the tribunal may nevertheless decide that it should be decided in that way. However, the tribunal can only take that step if all of the following conditions are satisfied:
(See SI 2009/273, rule 5A.)
This amendment to the tribunal rules is expressed to expire at the same time as the Coronavirus Act 2020, so on 24 March 2022, unless that date is either brought forward or extended (SI 2020/416, reg 1(2); Coronavirus Act 2020 ss 89, 90).
Complex and standard appeals
If the taxpayer appealed to the tribunal before 24 March 2020 and was told that the case had been classified as complex or standard, the appeal will normally be stayed until 30 June 2020. This is because the president of the FTT issued a ‘general stay’ on 24 March 2020 that was extended on 21 April 2020 by a ‘further general stay’. However, note the following points:
If your case is one of those affected by the general/further stay, you are likely to hear nothing about the appeal during this time, and it will not move forward.
However, in any particular case, the tribunal may decide that the appeal can be moved forward, and, if so, it will issue specific directions.
A party who objects to the case being stayed, perhaps because it is very urgent, can apply for the stay to be lifted. That might be the position for example where HMRC is threatening the taxpayer with bankruptcy.
Note that if the pandemic continues, the stay may be extended beyond 30 June 2020.
All other appeals
The tribunal president’s general stay issued on 24 March 2020 stayed all appeals received after that date until 21 April 2020. The further stay which followed only affected certain standard and complex appeals (see ‘Complex and standard appeals’ above).
All appeals other than those covered by the further stay are thus no longer stayed. As a result:
Hearing of appeals
Until further notice, there will be no hearings at which people are physically present, unless the president gives permission (see ‘Physical hearing before the end of the pandemic’ below). If the taxpayer’s hearing was listed to take place before 31 August 2020, you are likely to have already been informed that it has been cancelled.
The tribunal is considering how to hear those appeals. There are the following possibilities:
All of these are explained further below.
The judiciary is making good progress in hearing appeals by phone and video. A daily breakdown of the number of cases heard remotely in all courts and tribunals in England and Wales is available on the Gov.uk website (see bit.ly/2zytGQ6).
The tribunal is now publishing a list of cases which are to be heard in the following week (see bit.ly/3bp5LA7).
Paper hearing
The tribunal rules allow cases other than those categorised as default paper to be dealt with on the papers, without an oral hearing, if the parties consent. The tribunal may ask you if you agree to the appeal being dealt with in this way (see the Statement of conduct of business in the First-tier Tribunal at bit.ly/2WS1OyK; SI 2009/273, rule 29).
If you agree, you will be issued with specific directions to move the case forward so the appeal can be dealt with on the papers by a judge. You will need to liaise with HMRC to ensure that the tribunal is provided with all relevant documents in an electronic format; where possible, that format is also to be editable. Remember to think carefully about what factors are relevant to the taxpayer’s position and provide all the relevant evidence and arguments in good time. It is likely to be too late to do so after the judgment has been issued (see Updated guidance on the administration and conduct of proceedings).
As stated earlier, when sending documents by email, it is important to check the size of the files, as an email with attachments exceeding 25mb in total (in the case of the tribunal) or 10mb in total (in the case of HMRC) is likely to be rejected by the firewall. Any emails sent to the tribunal should receive an automatic acknowledgement. If this is not received, it is suggested that you call or email the tribunal clerks to check that the email has not been blocked by the firewall or treated as junk mail. The email address is taxappeals@justice.gov.uk. You should put ‘new appeal’ and the appellant’s name in the header box for the email.
If you disagree with the case being decided on the papers, consider whether the case is suitable for a phone or video hearing: see below.
Note that even if you disagree, the tribunal may nevertheless decide to go ahead in any event if all of the following conditions are satisfied:
(See SI 2009/273, rule 5A.)
This is a new rule which applies only for as long as the Coronavirus Act 2020 is in force. It is expected to expire on 24 March 2022, unless that date is either brought forward or extended (SI 2020/416, reg 1(2); Coronavirus Act 2020 ss 89, 90).
Phone/video hearing: general
The tribunal will contact you if it considers the case is suitable for a phone or video hearing. If you agree, you should liaise with HMRC to ensure that the tribunal is provided in advance with all relevant documents in an electronic format; where possible, that format is also to be editable. Remember the points made above regarding the total size of each email. You should ask HMRC to acknowledge each email to ensure you have a record that all the emails have been received (see Updated guidance on the administration and conduct of proceedings).
If a case is listed for a phone/video hearing, the word ‘hearing’ in the tribunal rules applies to that hearing (Pilot practice direction on contingency arrangements, para 7).
Phone hearings are likely to be conducted using BT-MeetMe, and so should be simple for taxpayers and their advisers: no particular special requirements or technologies are required. It will be possible for a number of different people to be on the call, including witnesses.
Video hearings are likely to be conducted using the tribunal’s existing video-hearing technology, but Cloud Video Platform and Skype for Business may also be used. You will be asked if you, the taxpayer and any witnesses can engage with that methodology. You will need to contact all those involved, and ensure that they have access to the relevant technology (i.e. computer with internet access, webcam and microphone) and are sufficiently competent so that they can use it for the hearing. Electronic bundles are likely to be required, and thus two screens will be needed, one to see the bundle and one to participate in the hearing. The second screen can be a tablet or similar. It may be necessary for participants to download applications in advance of the hearing to support the video hearing (see the guidance HMCTS telephone and video hearings during coronavirus outbreak at bit.ly/2WKolx7).
Third parties, including journalists, may ask to attend the hearing by joining the audio or video call, in the same way as they could have attended an oral hearing in person. The relevant practice direction says that: ‘Where a media representative is able to access proceedings remotely while those proceedings are taking place, the proceedings will constitute a public hearing for the purposes of the relevant Chamber’s procedure rules’ (Pilot practice direction on video/audio hearings, para 5).
For practical details of how to join a phone or video hearing, see the guidance on the Gov.uk website (see bit.ly/2Z30eg9). Participants will need a quiet space where they will not be disturbed during the hearing.
Phone/video hearing: failure to attend
If the taxpayer is unable to attend the listed video/audio hearing, an application to adjourn must be made, with reasons. This can be simply via an email to taxappeals@justice.gov.uk, but you will need to explain why you or the taxpayer cannot attend and attach any relevant evidence. Be sure to put your tribunal reference number and the date of the hearing in the header box of the email, and, if the hearing is within the next few days, put ‘URGENT’ in the header box as well.
If a party fails to attend a phone/video hearing without making an application for it to be adjourned, wins the appeal and then applies for the decision to be set aside on the basis of non-attendance, the tribunal is unlikely to allow that application (SI 2009/273, rule 38(2)(d); Pilot practice direction on contingency arrangements at para 9).
Thus where, for example, the appellant wins on one ground but considers that another ground should also have been successful, it is unlikely that the decision will be set aside.
There is no similar adverse presumption if a party:
Nevertheless, you will need to show that it is in the interests of justice to set aside the decision, despite the failure to attend and the failure to apply for an adjournment (SI 2009/273, rule 38(2)(d)). For an example of the tribunal considering that rule, see Rashidi v HMRC [2016] UKFTT 357 (TC).
Phone/video hearing: recording
The normal position in the tribunal is that hearings must be held in public, with certain very limited exceptions, such as to protect national security (SI 2009/273, rule 32(1)).
An amendment to the tribunal rules, effective from 10 April 2020, allows a hearing to be in private if all of the following conditions are met:
(See SI 2009/273, rule 32(2A).)
This amendment to the tribunal rules is expressed to expire at the same time as the Coronavirus Act 2020, so on 24 March 2022, unless that date is either brought forward or extended (SI 2020/416, reg 1(2); Coronavirus Act 2020 ss 89, 90).
To facilitate the continuation of the normal position that hearings are in public, the Coronavirus Act 2020 provides that the tribunals may direct that the hearing is broadcast, or that it be recorded (SI 2009/273, rule 31; Coronavirus Act 2020 s 55, Sch 25; TCEA 2007 ss 29ZA–29ZD).
There is no current expectation that FTT hearings will be broadcast. However, they may be recorded, and this must happen unless it is not practicable. This is the case even if a media representative was able to access the proceedings remotely while they were taking place. The only reason why a phone/video hearing will not be recorded is that it is not practicable to do so (SI 2009/273, rule 32A; see also Pilot practice direction on video/audio hearings).
If the hearing is recorded, the recording will be available to the parties on request. It will also be available to third parties (see Updated guidance on the administration and conduct of proceedings; Pilot practice direction on video/audio hearings).
The fact that the recording can be made available to any person after the hearing may have implications for privacy and confidentiality. In the past, most hearings were not attended by anyone other than the parties, although they were open to the public. Now any person can ask for and obtain a recording of the hearing after the event.
The Coronavirus Act 2020 also sets out criminal penalties to be levied on those who make an unauthorised recording, or an unauthorised transmission of the hearing (TCEA 2007 ss 29ZB, 29ZC).
Objecting to a phone/video hearing
If you consider that a phone/video hearing is not in the interests of justice, you should inform the tribunal as soon as possible and give your reasons. This can be simply via an email to taxappeals@justice.gov.uk, but you will need to explain your reasons and attach any relevant evidence. Be sure to put your tribunal reference number and the date of the hearing in the header box of the email, and, if the hearing is within the next few days, put ‘URGENT’ in the header box as well.
Possible reasons might include a witness being unable to access video technology (but consider then whether an audio hearing might be possible) or the length/complexity of the hearing, the need to have an interpreter, and/or the extent of the disputed evidence and cross-examination (see the message from the Lord Chief Justice, Master of the Rolls and President of the Family Division, at bit.ly/2xSjW2K). However, note that both the Supreme Court and Court of Appeal have conducted video hearings since the beginning of the coronavirus pandemic by reference to the similar position in the civil courts. In April 2020, the High Court in One Blackfriars Ltd (in liquidation) [2020] EWHC 845 (Ch) refused an application to adjourn a five-week trial, and explained the reasons why.
Objections on the basis that the general public may be able to obtain copies of the recording are unlikely to succeed.
Physical hearing before the end of the pandemic
Although the normal position is that there will be no physical hearings at which parties are present for the foreseeable future, there may be exceptional cases. If you consider that the taxpayer’s case (a) cannot be dealt with on the papers, by phone or by video, and (b) cannot wait until after the end of the coronavirus lockdown, you must apply to the president of the tribunal, setting out your reasons. His permission (or that of his delegate) is required before a live hearing can take place (see Updated guidance for users on the administration and conduct of proceedings).
There is specific guidance on social distancing and other measures if an oral hearing does take place (see Guidance for tribunal judges and members: Covid-19 measures, dated 23 March 2020).
Physical hearing in the future
Cases which cannot be dealt with on paper, by video or by audio because it is not in the interests of justice, and cases which cannot be dealt with because of insufficient capacity in the tribunal, will be relisted for an oral hearing as soon as possible after the end of the coronavirus lockdown (see Updated guidance for users on the administration and conduct of proceedings).
If you have an appeal which has been listed for a hearing well into the future, the tribunal is unlikely to change those arrangements at this stage, in the hope that the appeal can proceed as planned.
Triage
The Pilot practice direction on contingency arrangements says that a tribunal may ‘triage’ cases, and it sets out a possible procedure. There is nothing currently to suggest that the FTT will use that process.
Appealing a tribunal decision
If your appeal has already been heard by the tribunal, and you received a written judgment before 24 March 2020, the tribunal rules provide for specific time limits in relation to the next stage. These are normally set out at the end of the judgment.
The time limits in the rules are:
Those time limits were extended by the general stay until 21 April 2020, but they have now begun to run again. The same is true of the 28-day time limit for applying for a decision to be set aside. The further stay that applies to certain complex and standard cases does not extend these time limits (SI 2009/273, rule 38(3)).
Be very careful not to miss the new time limits. Although it is possible for the FTT to allow a permission to appeal application to be made after the time limit if you have good reasons for being late (which may include coronavirus-related matters), the tribunal may decide that your reasons are not sufficient.
If the judgment in your case was issued after 24 March 2020, it was not covered by the general stay. Check the final paragraph of the judgment carefully: the judge may have granted a longer time period because of the coronavirus. Otherwise, you must comply with the time limits set by the tribunal rules and referred to at the end of the judgment.
The Upper Tribunal
The position for appeals currently before the Upper Tribunal is set out at the judiciary website (see bit.ly/2SXw75E).
This should be read together with the Pilot practice direction on video/audio hearings and the amendments to the Upper Tribunal rules in relation to video/audio hearings. The latter are essentially the same as the amendments to the FTT rules (new SI 2008/2698, rules 5A and 37A).
Judicial review
There is a strict time limit for judicial review. A claim must be made promptly, and in any event, no later than three months after the grounds to make a claim arose (Civil Procedure Rule 54.5; HMRC’s Appeals reviews and tribunals guidance at ARTG12040).
In accordance with the protocol, the first step in a judicial review case is normally to send a pre-action letter to the person who made the decision you are challenging. The purpose of a pre-action letter is to set out the grounds of your appeal and to invite settlement, rather than going straight to the court. You must follow the format for the pre-action letter set out in the civil procedure rules (see Pre-action protocol for judicial review at bit.ly/2YSUntz; ARTG12030–ARTG12040).
Usually, a copy of the pre-action letter must be sent to the HMRC Solicitor’s Office by post. However, during the coronavirus lockdown, pre-action letters should be sent by email to preactionletters@hmrc.gov.uk. The letter should be in a common format, such as PDF or Microsoft Word, and the attachments should not exceed 10mb in total. Unless requested to do so, do not send a hard copy duplicate.
This email address is for pre-action letters only. Any other correspondence sent to that email address will be deleted unread. Once the case has been allocated to an HMRC lawyer, all subsequent correspondence should be sent to their HMRC email address (see HMRC’s press release, dated 9 April 2020). n
For further Tolley®Guidance on Covid-19 matters, see covid19.tolley.co.uk.
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