Tax challenges: why so taxing? ask Charles Brasted & Jamie Potter
The long-understood need for parallel proceedings arises from the limited statutory jurisdiction of the tribunal(s) empowered to hear appeals from the decisions of HMRC. The jurisdiction of the relatively new First Tier Tribunal (the FTT) is constrained in the same manner as its predecessor bodies (in the case of tax, the VAT and Duties Tribunal and the Special Commissioners for Income Tax). Thus, for example, s 83 of the Value Added Tax Act 1994 (VATA) sets out an (almost) exhaustive list of the matters appealable to the FTT in relation to VAT.
A difficulty, however, arises in circumstances where a taxpayer wishes to complain about, not just the application of the law by HMRC in relation to his tax matters, but also HMRC’s conduct in reaching its decision—that is, the taxpayer wishes to argue that irrespective of (or more usually, despite) the application of the law, HMRC’s decision should be struck down as being unreasonable, irrational or contrary to the taxpayer’s legitimate expectation (typically arising from a published concession or individual ruling).
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