Judgment summary
This is a decision on an application for permission to appeal to the Upper Tribunal, made following an oral hearing after permission had first been refused on the papers. The applicant, Fisher Hirst Ltd, sought to challenge a First-tier Tribunal decision that had upheld a VAT assessment of £63,600 issued by HMRC.
The sole ground of appeal concerned whether the assessment was made within the time limit set out in VATA s 73(6)(b), namely one year after evidence of facts sufficient to justify the assessment came to HMRC's knowledge. Judge Anne Redston refused permission to appeal, finding none of the grounds arguable.
Background
The Appellant is a scaffolding contractor in Northern Ireland that uses plastic sheeting as a wrap around buildings under construction [6]. The Commissioners in the Republic of Ireland provided HMRC with five invoices issued by the Appellant to an RoI-based company relating to supplies of plastic sheeting [5]-[6]. These invoices were received by HMRC in June 2020, although the Decision contained a typographical error stating June 2022 at [156]; the Upper Tribunal confirmed the correct date was June 2020 and that the FTT had been aware of this [8].
Officer Hannan requested information from the Appellant, including purchase and sale invoices, contracts, orders, proof of payment, transport documentation and bank statements [13]. No response was received, nor following a further request on 29 September 2021 [14]-[16].
On 9 March 2022, the Appellant's director, Mr Kieran Dynes, told Officer Hannan by telephone that the transactions had been omitted from the Appellant's VAT return [17]. On 4 April 2022, Mr Dynes confirmed in writing that the sales had taken place and asserted they were zero-rated as exports to the RoI, so the overall VAT position was unaffected despite not being recorded [19].
On 9 August 2022 further information was provided [25], and on 21 November 2022 the Appellant sent five tachograph cards with a report from Mr John Logue, found by the FTT to be an expert, as evidence that the goods had left the UK [29], [60]. Officer Hannan did not accept this evidence showed the goods had crossed the Irish land border, and told Mr Dynes so the same day, requesting any further information urgently [13]-[14].
On 23 November 2022, Officer Hannan issued his decision and the related assessment, based on information in the five invoices, because the Appellant had not kept evidence required by VAT Notice 725 to prove export to the RoI [41], [115]-[116]. The FTT refused the Appellant's appeal, holding that the statutory conditions in VATA s 73 were satisfied, including best judgement and the related time limits.
The Appellant made an in-time application to appeal the FTT Decision on 3 July 2025, refused by the FTT on 16 October 2025. An in-time application for permission to appeal to the Upper Tribunal was made on 7 November 2025. Judge Redston refused permission on the papers on 26 July 2026. The Appellant sought reconsideration at an oral hearing, held by video on 9 October 2026, with Mr Danny McNamee representing the Appellant and Mr Stuart Redpath attending for HMRC as an observer without making submissions [3]-[4].
Core dispute
The Appellant sought permission to appeal solely on the basis that the FTT should have found the assessment was made outside the time limit in VATA s 73(6)(b), which requires assessment within one year after evidence of facts sufficient, in HMRC's opinion, to justify the assessment comes to their knowledge [16].
Mr McNamee explicitly confirmed that the Appellant was not seeking permission to appeal on the basis that the transactions should have been found zero-rated due to sufficient export evidence; the only ground was the time limit point [17].
The Appellant argued that HMRC's last piece of evidence was the five invoices, received in June 2020, over two years before the assessment was issued in November 2022, and that HMRC had all the information needed to issue the assessment without considering the zero-rating question [18]-[19]. The Appellant also argued that the FTT misapplied the statutory test at [157] of the Decision, and that the FTT's approach would deprive s 73(6)(b) of effect by allowing HMRC to refresh the time limit simply by requesting further information.
Court findings
The Upper Tribunal applied the principle that an appeal from the FTT can only be made on a point of law under section 11 of the Tribunals, Courts and Enforcement Act 2007, and that permission requires an arguable error of law material to the decision, meaning a realistic rather than fanciful prospect of success [6].
Referring to DCM (Optical Holdings) v HMRC [2022] UKSC 26 at [18]-[22], which confirmed the approach in Pegasus Birds v C&E Commrs [2000] STC 91, the Tribunal noted that the focus under s 73(6)(b) is on the subjective opinion of the relevant HMRC official, challengeable only if that view is perverse, akin to Wednesbury unreasonableness [20].
The Tribunal found it was neither perverse nor unreasonable for Officer Hannan to decide he lacked adequate evidence to assess until he had sought and considered information about the Appellant's case that the goods had been exported [22].
On the FTT's approach, the Tribunal found it was not arguable that the FTT misunderstood the statutory time limit. The FTT had expressly identified the tachographs, provided in November 2022, as the 'last piece of evidence' at [122]-[124] of the Decision, and the assessment was issued on 23 November 2022, shortly after. The passage at [157] relied on by the Appellant was not the key passage and did not show a misstatement of the test [25]-[26].
On the submission that the FTT's approach deprived s 73(6)(b) of effect, the Tribunal found this was not a case where HMRC had failed to act on information received and then sought to refresh the time limit, because the last piece of evidence was the tachographs, not a refusal or failure to provide information [27]-[28].
Outcome
Permission to appeal to the Upper Tribunal was refused on all grounds advanced [29].
Major issues / areas of contention
- Whether the FTT correctly applied the one-year time limit for VAT assessments under VATA s 73(6)(b)
- Whether the 'last piece of evidence' for time limit purposes was the five invoices received in June 2020 or the tachograph cards provided in November 2022
- Whether the FTT's language at paragraph [157] of its Decision showed a misapplication of the statutory test
- Whether the FTT's approach would improperly allow HMRC to refresh the time limit by requesting further information, depriving s 73(6)(b) of effect
- A typographical error in the FTT Decision regarding the date the invoices were received by HMRC (recorded as June 2022 instead of June 2020)