Judgment summary
This is an oral renewal of an application for permission to appeal to the Upper Tribunal (Tax and Chancery Chamber) against a decision of the First-tier Tribunal (FTT) released on 17 July 2025, reported as Arif Abidi v HMRC [2025] UKFTT 00863 (TC). The FTT had struck out Mr Abidi's consolidated appeals against HMRC closure notices and penalty assessments under rule 8(3)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.
The Upper Tribunal judge had previously refused permission on the papers on 22 April 2026. Because the parties disputed what occurred at the FTT hearing, and no recording or transcript existed, directions were made to establish the hearing record following the procedure in Dexine Rubber Co v Alker [1977] ICR 434, as applied in Fiander v HMRC [2021] UKUT 156 (TCC). An oral hearing then took place on 14 October 2026, with Mr Abidi representing himself and Thomas Pearson of HMRC Legal Group appearing for HMRC.
Nine grounds of appeal, grouped into five thematic headings, were considered. Permission was refused on all grounds except a confined aspect of one ground concerning the separate treatment of the penalty appeals under rule 8(3)(c).
Background
The FTT Decision concerned HMRC's application to strike out Mr Abidi's consolidated appeals against closure notices and penalty assessments pursuant to rule 8(3)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, relating to income tax for 2011/12 and 2013/14. The amounts in issue on the closure notices were approximately £31,520 and £2,349 respectively, with penalties of £16,548 (2011/12) and £370 (2013/14) ([4]–[6]).
The substantive issues included whether payments received by Mr Abidi from companies of which he was a director and shareholder were taxable income or reimbursed employment expenses, and whether the statutory conditions for the penalties were satisfied ([3], [8]–[11]).
The FTT noted repeated failures by Mr Abidi to comply with directions requiring lists of documents, witness statements and a documentary bundle ([72]–[83]). Shortly before the strike-out hearing, Mr Abidi served a witness statement and substantial documentary material, including zipped files, which the FTT found was not presented or explained in a form enabling its contents and relevance to be adequately identified, and declined to admit as late evidence ([84], [108], [113]).
After considering the material it regarded as admissible and applying authorities including HMRC v Fairford Group [2014] UKUT 329 (TCC) and First De Sales LP v HMRC [2018] UKUT 396 (TCC), the FTT concluded that the appeal did not disclose a reasonable prospect of success and should be struck out ([89]–[101], [123]–[124]).
Core dispute
Mr Abidi sought permission to appeal the FTT's strike-out decision on nine grounds, grouped by the Upper Tribunal into five thematic headings: (1) the refusal to admit late evidence, the strike-out determination and treatment of an adjournment application (Grounds 1, 2, 7 and 8); (2) the application of rule 8(3)(c) and whether the FTT wrongly resolved disputed factual matters or failed to consider evidence reasonably expected at trial (Grounds 3 and 4); (3) whether the FTT failed to assess the penalty appeals separately from the tax appeals (Ground 5); (4) the FTT's treatment of alleged representative default (Ground 6); and (5) cumulative procedural fairness and Article 6 (Ground 9).
The central question for the Upper Tribunal was whether any of these grounds disclosed an arguable error of law by the FTT, applying section 11 of the Tribunals, Courts and Enforcement Act 2007, which confines appeals from the FTT to points of law.
Court findings
On Ground 1, the Upper Tribunal held that the FTT's refusal to admit the late evidence was a case-management decision within its discretion, and that the FTT's conclusion that neither Mr Abidi nor counsel adequately explained the contents or relevance of the late material was an evaluative judgment open to it, disclosing no arguable error ([9]–[18]).
On Ground 2, it was not illogical or unfair for the FTT to determine the strike-out application by reference to the evidence properly admitted, once the late evidence had been excluded ([19]–[22]).
On Ground 7, although the FTT Decision did not expressly address the refusal of the adjournment sought by counsel, the basis for refusal was sufficiently apparent from the Decision read as a whole, given the history of non-compliance and the inadequate explanation of the late material ([23]–[32]).
On Ground 8, although the later FTT permission decision wrongly stated that no adjournment application had been made, this error occurred in the permission decision, not the substantive Decision, and did not create a separate error of law ([33]–[36]).
On Grounds 3 and 4, the Upper Tribunal found that the FTT was entitled to evaluate whether Mr Abidi's explanation for missing records provided a realistic basis for expecting evidential gaps to be filled, without this amounting to a final determination of disputed tax liabilities. For 2011/12, identified documents did not link payments received to qualifying expenditure. For 2013/14, although receipts existed, no evidence had been provided reconciling the residual disputed expenditure against HMRC's objections ([39]–[65]).
On Ground 5, the Upper Tribunal found it arguable that the FTT had not separately applied rule 8(3)(c) to the penalty appeals, which involved distinct statutory conditions and burdens (deliberate conduct for 2011/12, carelessness for 2013/14), and had not adequately explained why each penalty appeal had no reasonable prospect of success ([66]–[71]).
On Ground 6, the FTT was entitled to apply the ordinary principle that a represented party is generally responsible for its representative's conduct, and its treatment of the alleged representative default disclosed no arguable error ([72]–[79]).
On Ground 9, the Upper Tribunal held that the cumulative fairness argument did not identify any feature beyond those already addressed under the other grounds, and that Article 6 did not provide a separate arguable ground in relation to the tax assessments, though the confined issue under Ground 5 was relevant to the penalty appeals ([80]–[90]).
Outcome
Permission to appeal was refused on Grounds 1, 2, 3, 4, 6, 7, 8 and 9 ([99]). Permission to appeal was granted only on a confined aspect of Ground 5, framed as: "Whether the FTT erred in law by failing separately to apply rule 8(3)(c) to the Applicant's appeals against the penalties for 2011/12 and 2013/14, having regard to the distinct statutory conditions and burdens applicable to each, and by failing adequately to explain why each penalty appeal had no reasonable prospect of success" ([68], [100]).
The grant did not extend to challenges concerning the calculation or amount of the penalties, potential lost revenue, reductions, suspension or Article 6, nor to any separate case that the FTT should have adjourned the hearing or permitted amendment of the penalty grounds ([70]–[71]).
Mr Abidi was directed to confirm within 28 days whether he wished to pursue the appeal on the confined ground, failing which no notice of appeal would take effect and the Upper Tribunal proceedings would end ([91]–[98], [101]).
Major issues / areas of contention
- Whether the FTT gave disproportionate weight to the lateness and presentation of late evidence without adequately considering relevance, explanation for default, prejudice and curative measures (Ground 1).
- Whether the FTT failed to consider the combined effect of excluding evidence, refusing an adjournment, and then determining strike-out on the remaining limited evidence (Ground 2).
- Whether the FTT misapplied rule 8(3)(c) by resolving disputed factual and evidential matters that should have been left for a substantive hearing (Ground 3).
- Whether the FTT failed to consider evidence already available or reasonably expected to be available at a substantive hearing, including documents in HMRC's bundle and VAT analysis material (Ground 4).
- Whether the FTT failed to assess the penalty appeals separately from the tax appeals, given the distinct statutory conditions for deliberate conduct, carelessness and reasonable care (Ground 5).
- Whether the FTT adequately addressed representative default attributed to Mr Abidi's former professional advisers as an explanation for procedural non-compliance (Ground 6).
- Whether the FTT adequately explained why it proceeded to strike out the appeals rather than adopting a less final procedural course such as an adjournment (Ground 7).
- Whether an error in the FTT's later permission decision, incorrectly stating no adjournment application had been made, undermined the substantive strike-out decision (Ground 8).
- Whether the cumulative procedural history, including Article 6, deprived Mr Abidi of a fair opportunity to present and regularise his case (Ground 9).