Matthew Ivey v The Commissioners for HMRC

Introduction

1. With the consent of the parties, the form of the hearing was V (video) held on Teams. The documents to which we were referred are the Respondent Document Bundle comprising 1,445 pages, the Appellant’s document bundle comprising 31 pages, The Respondent Skeleton Argument and the Appellant 8 page ‘bundle with strike out response’.

2. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public. Background

3. The matter before the Tribunal was a strike out application by the Respondents (HMRC).

4. HMRC applied for strike out under Rule 8 of The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 on the grounds that: (1) The Tribunal had no jurisdiction to hear the matters under appeal and must strike out the Appellant’s appeal under Rule 8(2); or, in the alternative (2) The Tribunal should exercise its discretion to strike out the Appellant’s appeal under Rule 8(3)(c) because “there is no reasonable prospect of the appellant’s case…succeeding”.

5. Under Rule 8(2) “the Tribunal must strike out the whole or a part of the proceedings if the Tribunal does not have jurisdiction in relation to the proceedings or that part of them”.

6. The Appellant’s appeal was against: (1) A final closure notice issued on 20 May 2024 in the sum of £12,710.49 in respect of the tax year ended 5 April 2007 (the CN); and (2) Two discovery assessments with one issued on 14 February 2013 in the sum of £42,783.97 in respect of the tax year ended 5 April 2009 and the other on 19 November 2013 in the sum of £9,811.30 in respect of the tax year ended 5 April 2010 respectively (the DAs).

7. The Appellant’s grounds of appeal, contained in the Notice of Appeal, are as follows: “I have received the letter from Sarah McClymont of HMRC in which she has rejected my appeal. She stated that my next steps are either to appeal to the Tribunal or to accept her decision. I am not ready to accept her decision and wish to appeal to the Tribunal within the 30-day timeframe. My reason for appealing is that I am aware that the current Labour government has committed to a truly independent review of the loan charge. It has been asserted by various financial experts that the review conducted by Sir Amyas Morse was not free of interference from HMRC and HM Treasury. HMRC is using a discretionary power under s684(7A)(b) ITEPA2003 to determine that the deduction of tax was not the responsibility of the end users of my services. I do not believe this is a standard application of HMRC’s powers. Additionally, HMRC has looked to charge interest on income from the tax year ending 5 April 2007, which was only communicated to me in May 2024. I believe this is unfair. Had I known at the time, I could have paid this earlier and avoided such charges. I also highlight that HMRC acknowledged that the enquiry opening letter for 2007–08 was not legally served and they would reverse the APN for £18,835.47. However, this has not yet occurred, as they are linking it to other unresolved years. I believe the ongoing review of the loan charge and open tax years could impact this case. I request a pause of proceedings and freezing of interest until the review completes. Desired outcome: Pause the current HMRC process, freeze further interest, and allow Tribunal to review Discovery Assessments in light of any changes the review may produce.”

8. The Appellant stated at the hearing that he now understood it was not possible to appeal the application of statutory interest and withdrew this ground of appeal. Strike Out and Jurisdiction

9. HMRC applied for strike out under Rule 8(2) and, in the alternatively, under Rule 8(3)(c). The application under Rule 8(2) must be considered first because the Tribunal’s jurisdiction is limited by statute and it has no power to consider matters beyond its jurisdiction. Therefore, if the Appellant’s grounds of appeal were outside the Tribunal’s jurisdiction there would be no option but to strike out under Rule 8(2), regardless of any merit to the Appellant’s arguments or sympathy the Tribunal may have with his position.

10. The limits of the Tribunal’s jurisdiction have been clarified and confirmed in decisions in the higher courts, which the Tribunal is bound to follow under the doctrine of precedent: “In Hoey , the Court of Appeal confirmed the FtT and the Upper Tribunal had been correct to decide that the FtT did not have jurisdiction. In summary, the Court confirmed, at [117], that the FtT is a creature of statute, created by s3 of the Tribunals, Courts and Enforcement Act 2007 “ for the purpose of exercising the functions conferred on it under or by virtue of this or any other Act ”. Its jurisdiction is therefore entirely statutory and it has no inherent jurisdiction equivalent to that of the High Court to consider public law arguments founded on common law, or even equivalent to the limited statutory jurisdiction exercised by the UT” ( Higgs & Ors v HMRC [2023] UKUT 296 (TCC) at para 25).

11. The question of jurisdiction must therefore be taken first, without detailed consideration of the underlying arguments the parties might seek to make were the substantive appeal to be heard.

12. HMRC submitted that all of the grounds of appeal raised by the Appellant were outside the jurisdiction of the Tribunal, so the appeal could not be heard and must be struck out under Rule 8(2).

13. The Appellant submitted that his appeal was against the CN and the DAs. He had a right to appeal these, as advised in HMRC’s Review Conclusion Letter of 9 December 2024. Indeed, on reading that letter it seemed clear to the Appellant that he had no option but to appeal to the Tribunal because if he did not, he would be deemed to have agreed with HMRC’s view expressed in that letter and to have accepted the CN and DAs. The Appellant did not agree with HMRC and was not prepared to accept the CN and DAs for the reasons given in his Notice of Appeal and responses to the Strike Out Application.

14. It is correct that there is a right of appeal against the CN and DAs. However, the Tribunal can only hear an appeal if the substance of that appeal is within its jurisdiction. Taxpayers may have valid concerns or complaints that are nonetheless outside the jurisdiction of the Tribunal. There may be another forum in which a taxpayer can pursue such issues. The fact that a taxpayer’s argument relates to something that could in principle be appealed in the Tribunal does not in itself mean it is within the Tribunal’s jurisdiction.

15. The Tribunal must therefore consider whether the points of appeal raised by the Appellant are matters within its jurisdiction to hear. Jurisdiction: Submissions and Discussion The Loan Charge arguments

16. With respect to the ‘Loan Charge arguments’, HMRC submitted that these grounds of appeal had no statutory basis and were therefore outside the Tribunal’s jurisdiction and must be struck out under Rule 8(2).

17. The Appellant acknowledged that the settlement terms available in relation to the Loan Charge did not apply to him because the Loan Charge itself (and therefore treatment of tax due under it) excluded years prior to 9 December 2010. He submitted, however, that this was arbitrary and unfair, noting that this was a view shared by others, including Ray McCann, who conducted the most recent review of the matter. The Appellant submitted that it was objectively unfair that similar settlement terms to those now available in relation to the Loan Charge were not available to taxpayers like him, merely because of an arbitrary cut-off date. Given the significant changes in relation to the Loan Charge to date, he believed that further changes should and may yet be introduced, under which the more favourable terms would apply to him.

18. The Tribunal was not unsympathetic to the Appellant’s arguments in this respect. However, arguments of fairness and consistency of approach are a matter for judicial review. The Tribunal has no general power to hear such public law matters. Although a “court or tribunal that has no judicial review jurisdiction may nevertheless have to decide questions of public law in the course of exercising the jurisdiction it does have” ( Birkett (t/a Orchards Residential Home) v HMRC [2017] UKUT 89 (TCC) at para 30), if the ground of appeal itself is a matter of public law, the Tribunal has no jurisdiction to hear it.

19. In this case, this ground of appeal is not ancillary to a matter within the Tribunal’s jurisdiction: it is not a question of whether HMRC followed the existing law correctly in issued the CN and raising the DAs, but rather a question of whether the existing law is fair. This is properly a matter for judicial review and as such outside the Tribunal’s jurisdiction. HMRC’s exercise of its power under s684 (7A) ITEPA 2003

20. The Tribunal’s jurisdiction to consider the exercise of HMRC’s power under s684 (7A) was considered specifically by the Court of Appeal in Hoey & Ors v R & C Commissioners [2022] EWCA Civ 656 : “Neither the First-tier Tribunal nor the Upper Tribunal has jurisdiction to review or address the exercise by HMRC of the 7A power. The only avenue for challenging its exercise is on judicial review in the Administrative Court.”

21. The Tribunal is bound by this decision and cannot but strike out this ground of appeal under Rule 8(2). The APNs

22. The Appellant acknowledged that the Tribunal could not hear a direct appeal against the APNs but submitted that the circumstances around their issue were relevant in demonstrating HMRC’s unreasonable behaviour in the matter more generally.

23. The Appellant submitted that HMRC’s approach had been inconsistent (demonstrated by issues with the APNs). The APN issued for year ended 5 April 2008 had been reversed because the discovery assessment for this tax year had not been legally served. The Appellant also noted that he had concerns about the issue of the APN for the year ended 5 April 2007.

24. HMRC submitted that complaints about its conduct were not within the jurisdiction of the Tribunal and could instead be raised through HMRC’s complaints procedure.

25. HMRC submitted that questions relating to the fairness of its procedures were matters for judicial review and as such outside the jurisdiction of the Tribunal.

26. As acknowledged by the Appellant, questions relating to the APNs are outside the Tribunal’s jurisdiction. Questions relating to the fairness of HMRC’s procedures are a matter of public law and therefore for judicial review. The Tribunal has no general supervisory authority over HMRC and issues relating to conduct are not within its jurisdiction in and of themselves, though they can be relevant where ancillary to a matter that is within the Tribunal’s jurisdiction. Further submissions by the Appellant

27. The Appellant stated that whether or not he had been overcharged under the CN and DAs was under appeal and that the assessments of tax were not agreed. He was concerned that if this appeal was struck out, HMRC would deem the matter to be “settled under agreement” as stated in the Review Conclusion Letter. He did not agree and did not want this to be the case. He wanted the matter to remain open and his concerns and objections to be heard.

28. The Tribunal is sympathetic to the Appellant and the points raised by him. We note that the Appellant has no legal qualifications nor legal representation. We acknowledge the Appellant’s concerns and the serious impact of these matters. We found the Appellant to be helpful, thoughtful and honest in his presentation of his case.

29. The question of the Tribunal’s jurisdiction is, however, a technical legal matter and can only be considered as such. The question the Tribunal has to decide is whether any of the grounds of appeal set out in the Notice of Appeal are within its jurisdiction to hear. Our analysis of each of them is above.

30. The Tribunal listened to the Appellant’s submissions during the hearing and note his further explanations for appealing the CN and DAs being that: (1) He does not accept them and so cannot let them stand and feels he must appeal; and (2) There is a question of whether he has been overcharged under them, especially in view of subsequent settlements proposed by the Morse and McCann reviews.

31. The Tribunal appreciates the Appellant having elaborated on his reasoning but this did not give rise to separate grounds of appeal that the Tribunal can consider. It remains the case that the Appellant’s objections to the validity of the CN and the DAs are based on the reasons given in the Notice of Appeal. Conclusion

32. The loan charge arguments are matters of public law outside the jurisdiction of the Tribunal.

33. The exercise of HMRC’s power under s684 (7A) is outside the jurisdiction of the Tribunal.

34. HMRC’s conduct, including in relation to the APNs, is outside the jurisdiction of the Tribunal.

35. The fairness of HMRC’s approach and procedures is outside the jurisdiction of the Tribunal.

36. The Tribunal did not find any other ground of appeal which was within its jurisdiction to hear, on consideration of the Notice of Appeal, the Appellant’s response to the strike out application or the submissions made by the Appellant during the hearing.

37. Having reached the above conclusion, consideration of HMRC’s alternative arguments under Rule 8(3)(c) was not necessary. Decision

38. The grounds of appeal are outside the jurisdiction of the Tribunal and must therefore be struck out under Rule 8(2).

39. The application is granted and the appeal is struck out. Right to apply for permission to appeal

40. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 05 th FEBRUARY 2026