This is a chapter from the Bloomsbury Professional book Hamilton on Tax Appeals, which is a guide to the entire tax appeals process. It covers every aspect of a dispute with HMRC from the initial decision onwards, including the HMRC internal review process. The authors provide a thorough review of the new Tribunal system, which was introduced in April 2009, including the rules, practice and procedure for cases in the Tax Chamber of the First-Tier Tribunal and the Tax and Chancery Chamber of the Upper Tribunal.
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Table of Contents
2.1 The statutory basis for the Tribunal is TCEA, ss 1–49 and Sch 1–9 which contain the general provisions for the new unified Tribunal system. The procedural rules for the Tribunal are contained in a number of statutory instruments made under TCEA: the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 SI 2009/273 (FTR ), which have been amended by the Tribunal Procedure (Amendment No 2) Rules 2010 SI 2010/44; and the Tribunal Procedure (Upper Tribunal) Rules 2008 SI 2008/2698 (UTR) which have been amended by the Tribunal Procedure (Amendment) Rules 2009 SI 2009/274, the Tribunal Procedure (Amendment No. 2) Rules 2009 SI 2009/1975 and the Tribunal Procedure (Amendment) Rules 2010 SI 2010/43. There are also several other statutory instruments made under TCEA:
the Qualifications for Appointment of Members to the First-tier Tribunal and Upper Tribunal Order 2008 SI 2008/2692;
the Appeals from the Upper Tribunal to the Court of Appeal Order 2008 SI 2008/2834;
the First-tier and Upper Tribunal (Composition of Tribunal) Order 2008 SI 2008/2835;
the Appeals (Excluded Decisions) Order 2009 SI 2009/275; and
the First-tier Tribunal and Upper Tribunal (Chambers) (Amendment No 3) Order 2009 SI 2009/1590.
There is also the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 SI 2009/56, made under TCEA and FA 2008, which is primarily concerned with the HMRC review process but also contains provisions relating to appeals, including the transitional provisions for appeals which had been started before 1 April 2009 when the new Tribunal came into being (Chapter 23).
2.2 The legislative provisions have been supplemented by Practice Directions and Practice Statements. The Practice Direction 'Classes of cases specified under section 18(6) of the Tribunal Courts and Enforcement Act 2007' (3 November 2008) was made by the Lord Chief Justice, and the following Practice Directions were made by the Senior President of Tribunals:
Upper Tribunal – Transcript of proceedings (30 October 2008);
First-tier and Upper Tribunal – use of the Welsh language in Tribunals in Wales (30 October 2008); and
First-tier Tribunal – categorisation of cases in the Tax Chamber (10 March 2009).
The Senior President of Tribunals has also issued the following Practice Statements:
'Delegation of functions to staff in relation to the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal' (10 March 2009);
'Composition of Tribunals in relation to matters that fall to be decided by the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal on or after 1 April 2009' (10 March 2009);
'Composition of Tribunals in relation to matters that fall to be decided by the Tax Chamber of the First-tier Tribunal and the Tax and Chancery Chamber of the Upper Tribunal on or after 1 September 2009' (27 August 2009).
2.3 All appeals and originating applications are sent to a Central Processing Centre (CPC) in Birmingham (see 2.20 for the address) which is operated by the Tribunals Service. The CPC liaises with the appellant and HMRC to make arrangements for the appeal to be heard. The CPC is responsible for allocating a case to one of four categories: the Default Paper category, the Basic category, the Standard category or the Complex category (Chapter 13). The CPC is the single point of contact between the First-tier Tribunal and HMRC. Once a case has been allocated to a category the CPC informs HMRC of the appeal by notifying the HMRC Appeals Clearing House (see 2.4) and sends any relevant documents to the Clearing House. Cases in the Default Paper and Basic categories are administered by the CPC. Cases in the Standard and Complex categories are administered by the permanent Tribunal centres in London, Manchester or Edinburgh (see 2.5), as appropriate.
2.4 The HMRC Clearing House, which is based in York, is the Tribunal's first point of contact with HMRC. The Tribunals Service forwards each notification of an appeal to the Clearing House which then identifies to which HMRC Appeals Unit the appeal should be sent. The Clearing House sends direct tax (including SDLT) appeals and originating applications from taxpayers to the relevant Appeals Unit. Indirect tax appeals are sent to the HMRC Solicitor's Office, copied to the relevant Appeals Unit, if it can be identified. The Appeals Unit/Solicitor's Office then notifies the Tribunal of the contact details of the person in HMRC who is preparing the case. Any future correspondence is then between that person and the Tribunal without reference to the Clearing House. The Clearing House does not enter into correspondence with an appellant. If any details of an appeal are not clear, the papers will be passed to the relevant business area to trace the decision maker or contact the appellant, as appropriate.
2.5 The Tribunal is independent of HMRC and comes under the control of the Tribunals Service, an agency of the Ministry of Justice. The intention is that an appellant in the First-tier Tribunal should be able to have his appeal heard at a place which is convenient for him and his witnesses and one of the advantages of the new system is that the Tribunals Service can use any of the hearing facilities of the unified tribunal system for Tribunal appeals. First-tier Tribunal cases will therefore be heard at a number of locations around the country and a full list of tribunal addresses is available on the Tribunals Service website at http://www.tribunals.gov.uk (http://bit.ly/agWRso). At present there are permanent Tax Tribunal centres in London, Manchester and Edinburgh. The Tax and Chancery Chamber of the Upper Tribunal is based in London although some cases may be heard in Manchester or Edinburgh.
2.6 The Senior President of Tribunals, currently the Right Honourable Lord Justice Carnwath CVO, is appointed under TCEA, s 2 and Sch 1. He is responsible for all the tribunals in the unified tribunal system. One of his functions is to assign judges and other members of the First-tier and Upper Tribunals (including himself) to Chambers of the First-tier and Upper Tribunals (TCEA, s 7 and Sch 4, para 9). A judge or other member of the Upper or First-tier Tribunal cannot be assigned to a particular Chamber without his or her consent and the consent of the Chamber President (TCEA, Sch 4, para 12(4). In assigning a judge or member to a particular Chamber the Senior President must follow a published policy which ensures that appropriate use is made of the knowledge and experience of the judge or member (TCEA, Sch 4, para 13).
2.7 The Senior President is responsible for maintaining appropriate arrangements for the training, guidance and welfare of judges and other members of the Upper Tribunal (TCEA, Sch 3, para 9) and the First-tier Tribunal (TCEA, Sch 2, para 8). He is also responsible for representing the views of Tribunal judges and members to Parliament, to the Lord Chancellor and to Ministers of the Crown generally (TCEA, Sch 1, para 14) and he may lay before Parliament written representations on matters that appear to him to be matters of importance relating to Tribunal judges and members or 'otherwise to the administration of justice by tribunals' (TCEA, Sch 1, para 13). TCEA, s 2 provides that in carrying out his functions the Senior President must
'have regard to –
(a) the need for tribunals to be accessible,
(b) the need for proceedings before tribunals –
(i) to be fair, and
(ii) to be handled quickly and efficiently,
(c) the need for members of tribunals to be experts in the subject-matter of, or the law to be applied in, cases in which they decide matters, and
(d) the need to develop innovative methods of resolving disputes that are of a type that may be brought before tribunals.'
2.8 The President of the Tax and Chancery Chamber of the Upper Tribunal, currently the Honourable Mr Justice Warren, is appointed under TCEA, s 7 and Sch 4 to preside over the Upper Tribunal. One of his functions is to make arrangements for the issuing of guidance on changes in the law and practice as they relate to the functions allocated to that Chamber (TCEA, Sch 7, para 7).
2.9 The Acting President of the Tax Chamber of the First-tier Tribunal, currently Sir Stephen Oliver QC, is appointed under TCEA, s 7 and Sch 4, para 6 to preside over the First-tier Tribunal. Again, one of his functions is to make arrangements for the issuing of guidance on changes in the law and practice as they relate to the functions allocated to that Chamber (TCEA, Sch 7, para 7).
2.10 Cases in the First-tier Tribunal are heard either by legally qualified judges, sitting with or without Tribunal members, or by Tribunal members sitting without a judge. Tribunal members are not legally qualified but have other relevant professional qualifications, such as accountancy or surveying, or other relevant experience, as set out in The Qualifications for Appointment of Members to the First-tier Tribunal and Upper Tribunal Order 2008 SI 2008/2692.
2.11 TCEA, s 4 provides that the judges in the Tax Chamber of the First-tier Tribunal can be any of the following:
a person who has been legally qualified for at least five years who has been appointed under TCEA, Sch 2, para 1(1);
a judge who has been transferred under TCEA, s 31(2) from a former Tribunal. Under the Transfer of Functions and Revenue and Customs Appeals Order 2009 SI 2009/56, art 5, which was made under TCEA, s 31(2), VAT and duties Tribunal Chairmen and Deputy Special Commissioners all became judges;
an Upper Tribunal judge;
a legally qualified member of the Asylum and Immigration Tribunal who is not an Upper Tribunal judge; or
a member of a panel of Chairmen of Employment Tribunals.
2.12 TCEA, s 4 provides that the members of the First-tier Tribunal are drawn from the following:
someone who has been appointed under TCEA, Sch 2, para 2(1) who has an appropriate qualification as set out in the Qualifications for Appointment of Members to the First-tier Tribunal and Upper Tribunal Order 2008 SI 2008/2692;
a member who has been transferred in under TCEA, s 31(2) from a former tribunal. Under the Transfer of Functions and Revenue and Customs Appeals Order 2009 SI 2009/56, art 5, which was made under TCEA, s 31(2), members of the VAT and duties Tribunal and the section 706 Tribunal all become members;
members of the Upper Tribunal; or
members of a panel of the Employment Tribunals (other than Chairmen of Employment Tribunals).
2.13 The rules for which, and how many, judges and members may sit in the First-tier Tribunal are set out in the Practice Statement dated 10 March 2009: 'Composition of Tribunals in relation to matters that fall to be decided by the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal on or after 1 April 2009', which was made by the Senior President of Tribunals under the First-tier and Upper Tribunal (Composition of Tribunal) Order 2008 SI 2008/2835 (see 17.11).
2.14 Cases in the Upper Tribunal are heard by legally qualified judges sitting with or without members. Tribunal members are not legally qualified but have other relevant professional qualifications, such as accountancy or surveying, or other relevant experience, as set out in the Qualifications for Appointment of Members to the First-tier Tribunal and Upper Tribunal Order 2008 SI 2008/2692.
2.15 The judges in the Tax and Finance Chamber of the Upper Tribunal are drawn from the following list in TCEA, s 5:
the Senior President of Tribunals;
a person who has been legally qualified for at least seven years who has been appointed under TCEA, Sch 3, para 1(1);
a judge who has been transferred in under TCEA, s 31(2) from a former Tribunal. Under the Transfer of Functions and Revenue and Customs Appeals Order 2009 SI 2009/56, art 5, which was made under TCEA, s 31(2), the President of the VAT and Duties Tribunal, the Chairman of the section 706/704 Tribunal and all Special Commissioners became judges of the Upper Tribunal. VAT and Duties Tribunal Chairmen and Deputy Special Commissioners became deputy judges;
the former President, a Deputy President or another Senior Immigration judge of the Asylum and Immigration Tribunal;
a former Social Security Commissioner;
a former deputy Social Security Commissioner;
a judge of the Court of Appeal (of England and Wales or Northern Ireland), the High Court or the Court of Session; a district judge, a circuit judge, a county court judge or a sheriff;
a deputy judge of the Upper Tribunal (either under TCEA, Sch 3, para 7 or TCEA, s 31(2)); or
a Chamber President or a Deputy Chamber President of another Upper or First-tier Tribunal.
TCEA, s 5 provides that the members of the Upper Tribunal are drawn from the following:
someone who has been appointed under TCEA, Sch 3, para 2(1) who has an appropriate qualification as set out in the Qualifications for Appointment of Members to the First-tier Tribunal and Upper Tribunal Order 2008 SI 2008/2692;
a member who has been transferred in under TCEA, s 31(2) from a former Tribunal. (No members have been transferred in under the Transfer of Functions and Revenue and Customs Appeals Order 2009 SI 2009/56, art 5, which was made under TCEA, s 31(2));
a member of the Employment Appeal Tribunal;
a member of the Asylum and Immigration Tribunal who is not legally qualified.
2.16 The rules for which, and how many, judges and members may sit when hearing an appeal in the Upper Tribunal are set out in the Practice Statement dated 10 March 2009: 'Composition of Tribunals in relation to matters that fall to be decided by the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal on or after 1 April 2009', which was made by the Senior President of Tribunals under the First-tier and Upper Tribunal (Composition of Tribunal) Order 2008 SI 2008/2835 (see 17.12 and Appendix 3).
2.17 The Registrar of the Tax Chamber of the First-tier Tribunal, June Kennerley, is based at the CPC. She is appointed under TCEA, s 40(1) and has the power under the Practice Statement of 10 March 2009, 'Delegation of functions to staff in relation to the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal', to exercise the following judicial functions under the First-tier Tribunal Rules where authorised by the Chamber President:
case management under UTR, r 5;
allocation of cases to categories under UTR, r 23; and
making directions in relation to a private hearing under UTR, r 32.
By the same Practice Statement the Registrar is also authorised to carry out any case-management function in the Upper Tribunal under UTR, r 5.
2.18 FTR, r 4 and UTR, r 4 permit staff to carry out judicial functions if the Senior President of Tribunals has given general approval (r 4(1)). Such approval may apply generally to the carrying out of specified functions by members of staff of a specified description in specified circumstances (r 4(2)). If a member of staff makes a decision in accordance with r 4(1) a party may make a written application to the Tribunal to have the matter heard afresh by a judge (r 4(3)).
2.19 The staff of the First-tier Tribunal currently have approval to exercise case-management powers under FTR, r 5, allocate cases to categories under FTR, r 23 and determine whether a hearing should be held in public or private under FTR, r 32. The staff of the Upper Tribunal are currently approved to carry out any case-management function under UTR, r 5 for which they have been authorised by the Chamber President (Practice Statement of 10 March 2009: 'Delegation of functions to staff in relation to the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal').
2.20 Unless and until it is known that a case has been allocated to a particular centre, all contact with the First-tier Tribunal should be with the CPC at:
First-tier Tribunal (Tax)
Tribunals Service
Tax
2nd Floor
54 Hagley Road
Birmingham
B16 8PE
Telephone number 0845 223 8080
Textphone number via Typetalk 1800108452238080
E-mail taxappeals@tribunals.gsi.gov.uk
The address of the London Tribunal Centre is
45 Bedford Square
London
WC1B 3DN
Telephone number No: 0207 612 9700
Fax No: 0207 436 4150
E-mail: taxppealslon@tribunals.gsi.gov.uk
The address of the Manchester Tribunal Centre is:
Alexandra House
14–22 The Parsonage
Manchester
M3 2JA
Telephone number: 0161 833 5110
Fax number: 0161 833 5151
E-mail: vatman@tribunals.gsi.gov.uk
The address of the Edinburgh Tribunal Centre is:
George House
126 George Street
Edinburgh
EH2 4HH
Telephone number: 0131 271 4330
Fax number: 0131 271 4399
E-mail: email@taxappealsscot.org.uk
2.21 Any contact with the Upper Tribunal should be with
The Upper Tribunal Office, Tax and Chancery Chamber
45 Bedford Square
London
WC1B 3DN
Telephone number 0207 612 9700
2.22 The Tribunals Service has issued the following guidance and forms for the First-tier Tribunal in English and Welsh:
Notice of Appeal;
Guidance notes on completing the Notice of Appeal form;
Making an appeal;
At your hearing;
Further Appeal Notes final.
These are at Appendix 3 and can be obtained from the CPC or downloaded for the First-tier website at http://www.tribunals.gov (http://bit.ly/aWGMYN).
2.23 The Tribunals Service has issued the following guidance and forms for the Upper Tribunal in English and Welsh:
Appealing to the Upper Tribunal (Finance and Tax Chamber) forms;
Application for permission to appeal and Notice of Appeal from First-tier Tribunal (Tax);
Notes for Applicants and Appellants in filling in the appeal form.
These are at Appendix 3 and can be downloaded from the Upper Tribunal website at http://www.tribunals.gov.financeandtax (http://bit.ly/c1j6iP).
2.24 Information about the First-tier Tribunal, including the leaflets, forms and selected decisions, is available on the internet at http://www.tribunals.gov.uk/tax/.
2.25 Information about the Upper Tribunal, including the leaflets, forms and selected decisions, is available on the internet at http://www.tribunals.gov.uk/financeandtax/.