The First-tier Tribunal have ruled in the case of Reliable Shipping Ltd v HMRC  UKFTT 45 (TC).
The general rule in FA 1994 is that an appellant who wishes to bring an appeal against an assessment issued under s. 12 must pay or deposit the amount of the assessment with HMRC. If not, HMRC have the power to issue a certificate stating either that they have received adequate security from the appellant or that, on the grounds of potential hardship, a lesser level of, or no, security suffices.
If no such certificate is issued by HMRC an appellant can apply to the tribunal to decide whether HMRC should not have refused to grant such a certificate and that a reasonable level of security, if any, has been given.
In this case the appellant simply told HMRC that payment of the duty to HMRC would cause it hardship without offering security or sufficient supporting evidence. HMRC were not persuaded and did not issue the certificate. The appellant appealed to the tribunal.
One component of the appellant’s argument was that application of the European Convention on Human Rights and the Human Rights Act should mean that hardship should be judged at the date of the appeal hearing rather than at the date when HMRC had made the decision not to issue a hardship certificate. In respect of this the tribunal stated they were bound by Ferrazzini v Italy  STC 1314 where the European Court of Human Rights held that tax disputes fell outside the scope of civil rights and obligations because tax was a public law matter. As such FA 1994 should be construed purely in accordance with the usual principles of statutory construction.
It was ultimately held that as there had been very limited focus by the appellant on the onus of proof and the need for relevant, credible material evidence about hardship in the context of the provision of security or not the applications should be refused.
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