Judgment summary
This is a decision on an application for permission to appeal to the Upper Tribunal (Tax and Chancery Chamber) from a First-tier Tribunal (Tax Chamber) decision released on 10 July 2025 [1].
The FTT had struck out Mr Kelly's appeal against HMRC's decision dated 18 August 2023 to issue a consequential amendment notice under section 28B(4) of the Taxes Management Act 1970 (TMA), amending his self-assessment returns for 2002-3 to 2005-6 [2].
The FTT found it had no jurisdiction because the notice was not a closure notice or assessment appealable under section 31(1)(b) or (d) TMA, and no appeal right arose under section 32 TMA [4][5]. The FTT refused permission to appeal on 9 October 2025 [7], and Mr Kelly renewed his application to the UT [8].
Following an oral hearing on 25 February 2026, Judge Rupert Jones refused permission to appeal, finding no arguable error of law in any of the six grounds advanced [82][84].
Background
Mr Kelly was a member of two film partnerships, Invicta and Echo, and returned income from both on his tax returns [para 10 of FTT decision, cited at 19].
On 28 February 2017 HMRC issued closure notices to Invicta for the tax years 2002/2003 to 2005/2006. On 18 August 2023 HMRC issued a consequential amendment notice under section 28B(4) TMA amending Mr Kelly's self-assessment returns for those years [19].
Following further correspondence, HMRC sent a self-assessment statement dated 29 September 2023 showing a net amount due of £6,577.41 [18][19]. On 11 October 2023, Mr Kelly appealed to the FTT against adjustments totalling £6,581.16 [15][19].
The FTT released its decision on 10 July 2025 following a video hearing on 16 April 2025 and post-hearing submissions in June 2025, striking out the appeal under Rule 8(2)(a) for want of jurisdiction [1][31].
Core dispute
The central question was whether the FTT had erred in law in concluding it lacked jurisdiction to hear Mr Kelly's appeal, on the basis that the consequential amendment notice was neither a closure notice nor an assessment appealable under section 31(1)(b) or (d) TMA, and that no appeal right existed under section 32 TMA (the double assessment provision) [4][5][20]-[22].
Mr Kelly did not challenge the FTT's findings on section 31 TMA [23], but pursued grounds concerning the FTT's treatment of correspondence from March 2022 and January 2024, arguing this constituted a claim and refusal for the purposes of section 32 TMA, and that the FTT had failed to consider evidence, wrongly recorded facts, and had not applied the overriding objective of fairness under Rule 2(3) [29]-[30].
Court findings
The Upper Tribunal addressed six grounds of appeal in turn and found no arguable error of law in any of them [33]-[83].
On Ground 1 (withheld evidence), the Tribunal found no deliberate withholding by HMRC and no material bearing on the jurisdiction question [34]-[40].
On Ground 2 (applicability of section 32 TMA), the Tribunal found this was a new point not raised in the original grounds of appeal, and the FTT had rationally declined to determine it in the absence of submissions on the relevant correspondence [41]-[46].
On Ground 3, the Tribunal found no arguable error in the FTT's finding that the March 2022 emails were not raised at the hearing [47]-[51].
On Ground 4, the Tribunal agreed the FTT had correctly concluded that any arguable refusal by HMRC (in January 2024) post-dated the notice of appeal (October 2023), so the appeal could not have been against that refusal [52]-[56]. The Tribunal further examined the March 2022 correspondence itself and concluded it did not, on a fair reading, constitute a formal claim, refusal, or appeal for the purposes of section 32(1)-(3) TMA [62]-[77].
On Ground 5, the Tribunal found no error in the FTT recording HMRC's submission that overpayment relief was Mr Kelly's remedy, and found this immaterial to the jurisdiction decision [78]-[80].
On Ground 6, the Tribunal found the FTT's decision was limited to a jurisdictional strike-out question and Rule 2(3) fairness arguments did not affect that conclusion [81]-[83].
The Tribunal also considered whether the appeal was academic, noting HMRC's letters of 31 July and 15 September 2025 had resolved most of the disputed figures, save for approximately £300 relating to the 2004 partnership profit figure [84]-[97]. The Tribunal noted a possible but remote and insignificant prospect of a costs claim relating to the FTT proceedings [99]-[103], but concluded that permission was refused solely for absence of an arguable error of law [104].
Outcome
Permission to appeal to the Upper Tribunal was refused [84]. The Tribunal held that none of the six grounds of appeal disclosed an arguably material error of law in the FTT's decision, and there was no other compelling reason to grant permission [82]-[83].
Major issues / areas of contention
- Whether the FTT erred in finding it had no jurisdiction because the consequential amendment notice under section 28B(4) TMA was not a closure notice or assessment appealable under section 31(1)(b) or (d) TMA (not challenged on this appeal) [20]-[23].
- Whether correspondence between Mr Kelly and HMRC in March 2022 constituted a formal claim for the purposes of section 32(1) TMA (double assessment) [28][42].
- Whether HMRC's email of January 2024 constituted a refusal of such a claim, and whether this post-dated the October 2023 notice of appeal so as to fall outside its scope [52]-[56].
- Whether the FTT properly exercised its discretion in declining to determine the section 32 TMA point in the absence of submissions on the relevant correspondence [41]-[46].
- Whether HMRC had withheld material evidence relevant to the strike-out application [34]-[40].
- Whether the FTT's decision was inconsistent with the overriding objective under Rule 2(3) of the FTT Rules [81]-[83].
- Whether the appeal to the UT had become academic in light of HMRC's subsequent letters of 31 July and 15 September 2025 revising the disputed figures [84]-[98].
- Whether Mr Kelly could pursue a claim for costs relating to time spent on the FTT proceedings [99]-[103].