Contentious Tax Quarterly Review – Spring 2025

In this Contentious Tax Review, we consider a number of important decisions relating to correct forum, 'minded to transfer' orders, disclosure in judicial review, third party access to tribunal documents, applications to bring late appeals and HMRC's approach when responding to requests from taxpayers to be supplied with a copy of their personal information under subject access requests.

This blog is based on an article written by Adam Craggs and Liam McKay that was published in Tax Journal on 2 April 2025.

Recent procedural decisions

There have been a number of recent procedural decisions that are worthy of note.

Correct forum

In Local Fuel Ltd v HMRC [2025] EWHC 390 (Ch) (in which RPC was instructed on behalf of Local Fuel Ltd), the High Court considered an application by HMRC to strike out Local Fuel's Part 8 claim as an abuse of process. The claimant had sought a declaration that it did not owe an enforceable debt of c.£2m, representing allegedly unpaid fuel duty. HMRC presented a winding up petition based on the alleged debt, but subsequently agreed to withdraw the petition on terms that included that the claimant would bring the underlying issue before the court in a Part 7 or Part 8 claim. HMRC's position was that the claim raised an issue of public law that should have been pursued by way of judicial review relying on, amongst other things, the Court of Appeal's decision in Knibbs v HMRC [2019] EWCA Civ 1719.

In dismissing HMRC's application, the High Court observed that the claimant's claim was materially different to that in Knibbs because it was not seeking to have determined as unlawful, or ineffective, a decision or act of HMRC that created or altered any liability of the claimant or affected its rights. That was because no decision or action by HMRC gave rise to the debt disputed by the claimant, and there was no other decision or act of HMRC that could relevantly be challenged on grounds of unlawfulness.

Whether a claim has been filed in the appropriate forum is an important procedural consideration but one that taxpayers have often got wrong. The choice of forum can be critical,  sometimes proving fatal to a claim’s progress, and HMRC has demonstrated on numerous occasions that it is not averse to taking such procedural points. The Local Fuel decision is the latest example of a taxpayer successfully resisting HMRC’s attempt to strike out their claim on the grounds of incorrect forum. 

'Minded to transfer' Orders

In R (oao Aubrey Weis) v HMRC [2025] EWHC 249 (Admin), the High Court made a judicial determination on the papers as to where the taxpayer's judicial review claim should be administered and heard. The decision was unusual in that the court decided to give written reasons by way of a short judgment, which provides practitioners with some useful guidance on how the court will apply CPR PD 54C, which is intended to facilitate access to justice by enabling cases to be administered and determined in the most appropriate location.

The taxpayer sought judicial review of HMRC's decision to issue closure notices which concluded the taxpayer was domiciled in the UK and amended his self-assessment returns to impose income tax on income arising from a non-UK bank account. The taxpayer filed his claim in London, on the basis that it was the region with which he had the closest connection because he had significant business interests there, and both his and HMRC's legal representatives were London based. Following the issuing of a 'minded to transfer' order by a court lawyer indicating they were minded to transfer the claim to Manchester given the taxpayer resided in Salford, both parties made submissions to the court that the claim should remain in London. The taxpayer reiterated the presence of his substantial business interests in London, while HMRC's preference was for the case to remain in London for the convenience of the parties and their legal representatives, who were based in London. 

The court observed that the region with which the claim was “most closely connected” was the Northern region, being the region in which the taxpayer resided, noting that HMRC also had an office in Manchester. The court was also not persuaded by the parties’ desire for the claim to remain in London because they chose to instruct lawyers who were based in London. In that regard, the court noted that such choices could not drive the conclusion as to the appropriate venue, and that travel between London and Manchester could be conducted with ease and without requiring an overnight stay for a one-day hearing. Video hearing facilities were also available. The court commented that all of those factors, taken together, pointed in favour of the claim being administered and determined in the Northern region. However, on balance, the court considered it would be more appropriate for the claim to remain in London. That was mainly because, amongst other things, the taxpayer had applied for an order transferring his claim to the Upper Tribunal (UT) and the UT did not generally sit outside of London. In addition,  administrative oversight had meant that a decision on venue had been delayed for several months and transferring the claim to Manchester would cause further delay.

In the context of the resource pressures facing the courts, it will come as no surprise to practitioners that the courts are increasingly proactive in reallocating cases to regions outside of London. Taxpayers and their advisors cannot assume that proceedings will be heard in London simply because London-based counsel and solicitors have been instructed. To avoid delays and unnecessary costs, it will be necessary to assess, at the outset, whether a case is likely to be transferred and to prepare accordingly. 

Disclosure in judicial review proceedings

In Airedale Chemical Company Ltd v HMRC [2025] UKUT 00065 (TCC), the UT considered the taxpayer's application for specific disclosure against HMRC for the purposes of its judicial review claim. That claim challenged the lawfulness of HMRC’s decision to refuse the claimant’s requests for repayment under the Disguised Remuneration Repayment Scheme (the Scheme), on the basis of irrationality, unreasonableness and error of law. The repayments sought by the taxpayer related to sums previously settled by agreement with HMRC to avoid the application of the Loan Charge legislation in the Finance (No. 2) Act 2017.

The claimant contended that HMRC had failed to comply with its duty of candour, such that further disclosure was required for the fair and just resolution of the issues in dispute. In particular, the claimant sought disclosure of documents relating to the drafting and formulation of HMRC's guidance on the Scheme, HMRC's policy and internal communications in respect of issuing determinations and decisions in circumstances where the use of Employer Financed Retirement Benefit Schemes was suspected and how the decision was made to issue such determinations, decisions and county court recovery proceedings.

In dismissing the taxpayer's application, the UT determined that the documents sought by the taxpayer were irrelevant given there was nothing in HMRC's witness evidence indicating those extraneous materials had had any impact on its decision. Nor was such material relevant to establishing whether HMRC had misdirected itself in law because it was not relevant to the determination of what that correct legal test was. Accordingly, the UT concluded that HMRC had not breached its duty of candour. 

Given that orders for disclosure are rare in judicial review proceedings, it is perhaps unsurprising that the taxpayer's application was unsuccessful. However, while the duty of candour should generally be sufficient in ensuring that taxpayers challenging HMRC decisions are in possession of all information necessary for the fair and just determination of their claims, it is worth remembering that an application for disclosure remains an option and, in appropriate circumstances, should be considered as a means of ensuring that proper disclosure has been made by HMRC in accordance with its duty of candour. 

Third party access to documents filed with the First-tier Tribunal (FTT)

In Bolt Services UK Ltd v HMRC [2025] UKFTT 302 (TC), the FTT considered an application by a third party, Transopco UK Ltd, for the disclosure of documents relating to Bolt's tax appeal. The request included the grounds of appeal, HMRC's statement of case, the parties' skeleton arguments, and hearing transcripts. Transopco sought disclosure on the basis that its own tax appeal raised issues of law that were essentially the same as those raised by Bolt, but there were also some important differences that Transopco wanted to identify. While HMRC took a neutral position on Transopco's application, with the exception of the disclosure of the transcripts, Bolt opposed the application on the basis that the FTT had produced a well-reasoned decision setting out all of the relevant facts, disclosure of the documents was not necessary to advance the principle of open justice, all the relevant information about the parties’ submissions could be obtained from the transcripts, and disclosure of some of the documents would risk significant harm because they contained confidential and commercially sensitive information. 

Applying the principles identified by the Court of Appeal in Moss v The Upper Tribunal [2024] EWCA Civ 1414, the FTT observed that it was required to approach the application by first considering why access was sought and whether disclosure would advance the open justice principle, noting it was for the person making the application to show a good reason for seeking access and that there was no presumption in favour of disclosure. If there was a good reason for the documents to be disclosed, the tribunal was then required to consider whether there were any countervailing factors, such as a risk of any harm or prejudice that might be caused by the disclosure and the practicalities and proportionality of granting the request. 

As to the specific documents Transopco sought, the FTT determined that the hearing transcripts, pleadings, Bolt's witness statement (without exhibits), statement of agreed facts, and the parties' skeleton arguments should be disclosed. The FTT noted that the threshold to establish that there is a good reason why such documents should be disclosed was low, and that Transopco had demonstrated a good reason, namely, in order to understand more fully the way Bolt's case was put to the FTT and why it decided the case as it did. 

In contrast, the FTT refused Transopco's request for a copy of the exhibits to Bolt's witness statement, Bolt's expedition application and related documents, the hearing bundle, and Bolt's application for permission to appeal to the UT. This was because the FTT did not consider such documents to be central to understanding Bolt's case, such that Transopco had not shown a good reason for their disclosure and/or because disclosure of the documents would not advance the principle of open justice. With regard to the witness statement exhibits and the hearing bundle, the FTT noted that the documents were voluminous and that to direct disclosure would impose a disproportionate administrative burden on Bolt. However, the FTT said that if, having read Bolt's witness statement and the hearing transcript, Transopco considered that a more limited disclosure of specific exhibits and documents would advance the principle of open justice, it could make a further application to the FTT.

Given the significant number of tax appeals being heard by the tax tribunals, it is inevitable that, on occasion, the question of whether there is a common issue of fact and/or law between cases, will arise. Understanding the arguments advanced by other taxpayers and HMRC and the tax tribunals' reasoning in such cases can assist in formulating legal strategy and the appropriate action to be taken in an appeal. This decision provides valuable guidance on the circumstances in which access to documents filed with the FTT will be granted to third parties.

Late appeals

The FTT has released a number of decisions that emphasise that the test in Martland v HMRC [2018] UKUT 0178 (TCC), is a high hurdle that taxpayers must overcome if they wish to bring late appeals. 

The applications to bring a late appeal in Benjamin Hammant v HMRC [2025] UKFTT 244 (TC), Tenzing Wangel Lama v HMRC [2025] UKFTT 243 (TC), Brett Von Buddenbrock v HMRC [2025] UKFTT 211 (TC), PBS Wholesale Ltd v HMRC [2025] UKFTT 210 (TC), Jordan Lyden v HMRC [2025] UKFTT 204 (TC), and Xcel Consult Ltd v HMRC [2025] UKFTT 96 (TC), were all refused by the FTT after applying the Martland test. The range of circumstances in issue in these appeals were:

• A taxpayer failing to log into his personal tax account and view communications sent to him by HMRC notifying him of late filing fees, despite also receiving email alerts that HMRC had sent him communications.
• A taxpayer's near 5-year delay in bringing his appeal due to a mistaken belief that the loss of his business due to a fire meant that assessments and penalties he had been issued in respect of VAT and corporation tax, had fallen away.
• A South Africa based taxpayer who contended, amongst other things, that he did not know what was required to submit a formal appeal and that the postal system in South Africa could cause delays of 12-24 months.
• The alleged failure by the taxpayers' adviser to file appeals on their behalf. 
• A taxpayer's agent being ill with COVID, while the taxpayer was absent from the UK and not in a fit mental state to deal with his tax affairs. 
• A taxpayer's failure to appeal in time against default surcharges in respect of VAT, which had been caused by the actions of a previous accountant acting for the taxpayer and because the taxpayer had suffered a bereavement and health issues.

While every application to bring a late appeal will be determined on its own particular facts, the above cases provide a useful overview of the range of circumstances the FTT has recently considered and rejected. These cases emphasise that the test for allowing a late appeal is not easily satisfied and a taxpayer will have to have compelling reasons and supporting evidence for the delay, if their application is to be successful. 

HMRC's approach to DSARs

The recent High Court decision in Michael Ashley v HMRC [2025] EWHC 134 (KB) (in which RPC was instructed on behalf of Mr Ashley), has attracted a considerable amount of commentary and for good reason - practitioners will be only too familiar with the difficulties taxpayers face when seeking a copy of their personal information held by HMRC and HMRC's general  reluctance to provide such information. Mr Ashley's success in challenging HMRC's approach to his data subject access request (DSAR) will therefore be welcomed by many taxpayers. 

Between February 2014 and October 2016, HMRC enquired into Mr Ashley's 2011/12 tax return. HMRC subsequently issued a closure notice concluding that various properties had been sold by Mr Ashley at an overvalue, giving rise to a tax liability of c.£13.6m. Mr Ashley appealed and following discussions between the parties, the closure notice was withdrawn. Mr Ashley subsequently made a DSAR, requesting all information HMRC held in relation to him since the inception of its enquiry. HMRC refused to disclose any copies of Mr Ashley’s personal data that it held, save that it offered to provide him with a copy of inter-partes correspondence between his representatives and HMRC. With respect to the personal data it had withheld, HMRC claimed that it was lawfully entitled to withhold the data by virtue of the exemptions provided for in paragraphs 2 and 3, Schedule 2, Data Protection Act 2018 (DPA). 

Mr Ashley challenged HMRC's processing of his DSAR by way of a Part 8 Claim in the High Court. By the time the claim came before the court, HMRC had provided Mr Ashley with some of his personal data in a number of tranches throughout 2024, accepted that it had breached its obligations under Article 15(3) of the UK GDPR in its handling of the DSAR, and only relied on the tax exemption in paragraph 2, Schedule 2, DPA, to withhold some of Mr Ashley's personal data. However, a number of matters remained in dispute between the parties, including the application of the tax exemption relied on by HMRC to withhold Mr Ashley's personal data. The court therefore undertook a comprehensive review of the relevant case law, and identified the following principles as being relevant when construing the tax exemption:

• The relevant controller (in this case HMRC) bears the burden of proving the applicability of the exemption and thus its entitlement to refuse access. The ordinary civil standard of proof applies. 
• The starting point is that the data subject is entitled to the data unless the exemption is established and the presumption in favour of disclosure should be viewed as a strong and weighty factor. 
• The statutory wording requires the court to be satisfied of two things: (i) that the personal data in question was being processed for one of the specified purposes; and (ii) that the application of the subject access provisions would be “likely to prejudice one or more of those specified matters”. 
• “Likely”, in this context, does not mean more probable than not, but it connotes a significantly greater degree of probability than merely more than fanciful. Likely connotes that there is a very significant and weighty chance of prejudice to the identified public interests, the degree of risk must be such that there “may very well” be prejudice to those interests. 
• The question of whether disclosure is likely to prejudice the specified purpose(s) may include consideration of the consequential impact that disclosure in this particular case may have upon other cases and/or prejudice that would be caused to the activities and aims set out in the statutory provision more generally. 
• A structured and fact-specific approach is required; it is necessary to identify the prejudice, show how disclosure would cause the prejudice and show that a failure to apply the exemption would likely cause that prejudice. 
• Restrictions upon a data subject’s right of access may only be imposed where this is a necessary measure to safeguard the specified purpose. This is a strict test and those seeking to rely on the exemption must do so convincingly by relying on evidence that establishes this, not by mere assertion. 
• The necessity test requires that any interference with the subject’s rights is proportionate to the gravity of the threat to the public interest; and in making the proportionality assessment the court will take into account the value of the access right. The proportionality assessment must be applied to each item of personal data that is in issue. 

Applying the applicable principles, the court determined that HMRC had failed to establish that it was entitled to rely on the tax exemption because it had not discharged the burden of proving that the disclosure of Mr Ashley's personal data would be "likely" to prejudice the assessment or collection of tax. In arriving at that conclusion, the court found that “likely” connoted there being a very significant chance of prejudice to the public interest, which had to be established convincingly by evidence, rather than through mere assertion. Having determined the claim in his favour, the court also awarded Mr Ashley his costs.  

The High Court's judgment in Ashley is a significant rebuke to HMRC and its default position of withholding personal data when responding to a DSAR. Many taxpayers will have experienced HMRC’s reluctance to disclose their personal information, and often on the basis of flimsy and/or generic reasoning. The Ashley decision makes it clear that HMRC’s approach to DSARs is unlawful. It is a high threshold which HMRC must overcome if it wishes to rely on the tax exemption to withhold personal information sought by taxpayers under a DSAR.