The Upper Tribunal has rejected both HMRC’s appeal and a cross-appeal by the taxpayer company – HMRC v Bluecrest Capital Management (UK) LLP (BlueCrest) [2023] UKUT 232 (TCC). The UT considered the underlying legislation in ITTOIA 2005, s. 863A-863G but the appeals were rejected on the basis of the principles established in the 1950s case of Edwards v Bairstow, which had considered the distinction between appeals on points of fact or of law.
The UT noted that:
“The FTT Decision records that the evidence in the appeal comprised two significant bundles of documents, a statement of agreed facts and witness evidence from four members of BlueCrest. The Judge carefully analysed the evidence and made extensive findings of fact in the Decision.”
On the first ground of the HMRC appeal, the UT found that:
“There was no failure here to consider adequately the distinction between a traditional partner and an employee, let alone a failure adequately to consider the statutory question of significant influence. The Judge, as he was entitled to do, simply found it helpful to his analysis to consider the role of a partner in a traditional partnership.”
The UT similarly rejected the remaining eight grounds of the HMRC appeal. It also rejected both grounds of the taxpayer’s cross-appeal.
The key aspect of the appeals was, however, the additional comments made in the UT judgment:
“We observe that the Appeal and, albeit to a lesser extent, the Cross-Appeal both proceeded on the implicit assumption that there was no difficulty in our delving into and overturning detailed findings of fact made by the Judge, in a lengthy and carefully reasoned decision, following half a day of opening, two and a half days of oral evidence, not far short of four days of closing submissions, and scrutiny of the contents of a trial bundle running to thousands of pages of documents.
The reality was, and is that, in the absence of the Judge making some mistake in his construction of and approach to the Condition B question and/or the Condition A question, it was always going to be a difficult task to persuade this tribunal, as an appeal tribunal, that the Judge had made an error in his findings of fact of the kind which would permit this tribunal to interfere with those findings. This was borne out in the relevant parts of the oral argument, which illustrated the wisdom of what was said by Lewison LJ in Fage.
We consider it appropriate to return to the words of Lady Hale DPSC in Bates in the Supreme Court at [39], and to note that, in the present case, the Judge did what he was required to do, namely applying the words of the statute to the facts of this case, as he found them to be.”
https://www.bailii.org/uk/cases/UKUT/TCC/2023/232.html
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