Tribunal refuses HMRC permission to appeal to the Upper Tribunal against two case management decisions

In BGC Services Holdings LLP v HMRC [2025] UKFTT 700 (TC), the First-tier Tribunal (FTT) refused HMRC permission to appeal against the FTT's earlier decisions whereby it refused HMRC's application seeking further and better particulars from the taxpayer and granted the taxpayer's application that HMRC properly particularise its case.

Background

HMRC wrote to BGC Services Holdings LLP (BGC) in July 2016, setting out the effects of the provisions introduced by Finance Act 2014, relating to salaried members of limited liability partnerships, known as the Salaried Member Rules (SMR), and requesting details of the work undertaken to determine the application of SMR to its members. BGC co-operated with HMRC, responding to many questions and providing over 1,000 pages of documentary evidence.  

In March 2024, HMRC issued determinations to BGC totalling some £96 million for the tax years 2017/18 to 2019/20, inclusive, without any reasons being provided in the determinations themselves or covering correspondence (the Determinations). The Determinations were based on the application of the SMR. BGC appealed the Determinations to the FTT. 

HMRC made an application to the FTT for BGC to provide further and better particulars of its grounds of appeal which the FTT refused on 5 March 2025 (the First Decision). The FTT concluded that HMRC was required to provide reasons for its decisions, as a matter of public law, and it was not sufficient for HMRC to simply argue that once it had made an assessment, the burden rests on the appellant taxpayer. The FTT referred to Rule 25 of the Tribunal Procedure (First-tier Tribunal) (Tax Chambers) Rules 2009 (the Tribunal Rules), which requires HMRC to provide a Statement of Case (SoC), and confirmed that it was for HMRC to set out its position in compliance with Rule 25(2)(b). 

After HMRC issued its SoC, BGC made an application to the FTT for HMRC to properly particularise its SoC, which the FTT granted on 17 April 2025 (the Second Decision). The FTT concluded that HMRC had failed to set out key parts of its legal and factual case in its SoC and further particularisation was therefore necessary.  

HMRC made an application to the FTT for permission to appeal against both the First Decision and the Second Decision. 

FTT decision 

The application for permission to appeal was refused.  

In refusing HMRC's application, the FTT said that it was satisfied that both the First Decision and the Second Decision did not contain any errors of law and, significantly, none of HMRC's grounds of appeal had a reasonable prospect of success. 

The FTT said that it was clear that, neither BGC, nor the FTT could move forward to a hearing until HMRC explained the basis on which it had decided that BGC was liable to pay £96 million. 

Comment 

Given HMRC's failure to provide reasons in the Determinations themselves or the covering correspondence, it is surprising that HMRC sought further and better particulars from BGC and maintained this position in its application to the FTT for permission to appeal.

HMRC are expected to make an application to the Upper Tribunal, which was acknowledged by the FTT, for permission to appeal to the Upper Tribunal. It will be interesting to see whether HMRC proceed with such an application and if it does, whether it will receive a more sympathetic hearing before the Upper Tribunal. Given the circumstances, one would hope not.

The decision can be viewed here.