Judgment summary
This is a decision of the Upper Tribunal (Tax and Chancery Chamber) on an application for permission to appeal, following an oral reconsideration hearing, from a decision of the First-tier Tribunal (Tax Chamber) released on 9 December 2025 (the Decision).
The FTT had struck out Mr Powar's appeal against a personal liability notice (PLN) imposed on him under Schedule 41 of the Finance Act 2008, in the sum of £85,358.38, on the basis that the appeal had no reasonable prospect of success under Rule 8(3)(c) of the Tribunal Procedure (Upper Tribunal) Rules 2008 [2]-[3].
The FTT had earlier refused permission to appeal on all 8 grounds pursued (the PTA Decision, 17 April 2026). On renewed application to the Upper Tribunal, Judge Rupert Jones granted permission on grounds 2 and 3 but refused permission on grounds 1, 4 and 5 by decision dated 21 May 2026 [5]-[6]. The Applicant then renewed his application in respect of grounds 1 and 4 only, and this was reconsidered at an oral hearing on 10 September 2026 [7].
Judge Rupert Jones refused permission to appeal on both renewed grounds 1 and 4, concluding that neither disclosed an arguable error of law [38], [54], [64].
Background
Mr Powar was sole director and sole shareholder of Drinks 4 Less (UK) Limited (D4L), a company registered for VAT and as a High Value Dealer, which traded as a wholesaler and distributor of alcoholic drinks [10]-[12].
Following engagement with HMRC, including warehouse visits, HMRC issued 11 excise assessments against D4L totalling £195,105 on 10 October 2016, upheld on statutory review on 14 February 2017 [14]. HMRC also issued a penalty of £85,358.38 and a PLN against Mr Powar on 22 September 2017, appealed on 26 April 2017 (the excise proceedings) [15].
Separately, HMRC denied D4L's input tax deduction claims for 179 transactions under the Kittel doctrine, raised an assessment of £182,455, issued penalties of £83,019.70, and issued a PLN against Mr Powar in respect of the VAT penalty (the VAT proceedings) [16]. HMRC also refused to approve D4L under the Alcohol Wholesaler Registration Scheme (AWRS) in October 2016, which D4L appealed (the AWRS proceedings) [17].
The VAT, excise and AWRS proceedings were consolidated on 31 July 2018 pending litigation on Regulation 6(1)(b) of the Excise Goods (Holding Movement and Duty Point) Regulations 2010, then the excise proceedings were deconsolidated on 27 June 2019 [18]-[19]. Following D4L's liquidation on 16 November 2023, its liquidator withdrew D4L's VAT and AWRS appeals on 12 January 2024, leaving only the PLN issue live in the VAT proceedings [20]-[21].
Between 9 and 16 April 2024 the FTT heard Mr Powar's separate appeal against the VAT PLN and, in the May FTT Decision released 17 May 2024, found that Mr Powar knew D4L's transactions were connected with fraudulent evasion of VAT, that the inaccuracies were deliberate, and dismissed the appeal, confirming a PLN in the sum stated at [104] of that decision [22]-[24]. Permission to appeal the May FTT Decision was refused by the FTT and the UT [25].
In the FTT Decision under challenge, the FTT struck out the excise PLN appeal, finding that HMRC only needed to prove that duty had not been paid and that the Applicant had dealt with the goods, not that he knew duty was unpaid [26]. The FTT relied on findings in the May FTT Decision, sentencing remarks in related criminal proceedings, and HMRC's 14 February 2017 letter, concluding that the goods were smuggled and no evidence of duty payment had been provided [28]-[30]. The FTT also held that strike out did not breach Article 6 ECHR [31].
Core dispute
The dispute concerned whether the Applicant should be granted permission to appeal the FTT's strike out decision on two renewed grounds.
Ground 1 was that the FTT had impermissibly engaged in determining disputed facts, going beyond the proper scope of a strike out application under Rule 8(3)(c) of the FTT rules, by conducting a 'mini-trial', reaching inappropriate conclusions on limited evidence, failing to consider the possibility of further evidence at a substantive hearing, and reversing the burden of proof [32]-[37].
Ground 4 was that the FTT's exercise of its strike out power was contrary to Article 6 of the European Convention on Human Rights, because reliance on the earlier May FTT Decision and the strike out procedure itself deprived the Applicant of a fair opportunity to present his case, including through witness evidence [32], [49]-[53].
Court findings
On Ground 1, the Upper Tribunal held that the FTT did not carry out an impermissible mini-trial, having correctly set out and applied the principles from The First De Sales Ltd Partnership v HMRC [2018] UKUT 396 (TCC) [40]. The FTT was entitled to take into account findings and evidence from the May FTT Decision where relevant and overlapping with the excise issues, together with sentencing remarks and HMRC's 14 February 2017 letter, and to place weight on the Applicant's failure to provide any positive evidence that duty had been paid [41]-[42].
The Tribunal found the FTT was entitled to reach the conclusions it did given the Applicant had been given the opportunity to file evidence but did not do so, and had not identified any specific evidence he might adduce [44]-[46]. The Tribunal held that the argument on reversal of the burden of proof added nothing to grounds 2 and 3, on which permission had already been granted [47]. Ground 1 was found unarguable [38], [48].
On Ground 4, the Upper Tribunal held there was no arguable procedural unfairness or breach of Article 6 ECHR. The Applicant had a hearing at which he could have served evidence and made submissions, which his representative did, but he did not serve evidence as directed [55], [60]. The Tribunal noted that Rule 8(3)(c) itself sets a high threshold and is not in breach of Article 6, and that the FTT did not treat the May FTT Decision as binding or conclusive but considered the evidence afresh [56]. Reliance was placed on CF Booth Ltd v HMRC [2022] UKUT 217 (TCC), which confirms that the right to a fair trial does not preclude striking out an action where there is no reasonable prospect of success [57]-[59]. The Tribunal concluded the Applicant had a fair opportunity to address the FTT and to serve evidence, but failed to do so [61]-[62].
Outcome
Permission to appeal to the Upper Tribunal was refused on both renewed grounds of appeal, grounds 1 and 4 [64].
Major issues / areas of contention
- Whether the FTT exceeded the permissible scope of a strike out application under Rule 8(3)(c) by engaging in an impermissible determination of disputed facts
- Whether the FTT applied the correct standard for reliance on documentary evidence when striking out the appeal
- Whether the FTT failed to consider the possibility of further oral or written evidence emerging at a substantive hearing
- Whether the FTT reversed the burden of proof by requiring the Applicant to identify or provide evidence while relying on HMRC's material
- Whether striking out the excise PLN appeal, partly by reference to the earlier May FTT Decision on the VAT PLN, breached the Applicant's right to a fair trial under Article 6 ECHR
- Whether the strike out procedure was appropriate for issues said to turn on witness evidence, including reasonable excuse and deliberate behaviour