In the case of British Institute of Technology Ltd v HMRC [2026] UKFTT 651 (TC), the FTT has dismissed an application to strike out an appeal against a VAT assessment and associated penalty.
PROCEDURE – strike out application – previous appeal struck out for breach of an “unless” order – whether a new appeal against a different assessment relating to the same underlying subject matter should be struck out as an abuse of process – whether appeals against VAT assessment and penalty assessment should be struck out as having no reasonable prospect of success – rule 8(3)(c) of the First-tier Tribunal (Tax Chamber) Rules.
The appeal considered a disputed claim for input VAT on a building, which HMRC argued had been bought by the Appellant’s shareholder (Dr Farmer) rather than the Appellant (BIOT). An earlier appeal had been struck out for failure to follow a direction concerning either the payment of the outstanding tax or the making of a hardship application before the appeal could progress. This new appeal concerned a separate assessment, but as it was addressing the same transaction, HMRC argued that admitting the appeal would be an abuse of process and thus it should be struck out.
Identifying two alternative approaches, the FTT concluded that it should apply a broad merits-based approach. Considering the circumstances, the FTT decided not to strike out the appeal, judging that:
“bearing in mind the comments I have already made about the fact that the previous appeal was struck out at a very early stage, that there was no hearing on the merits, that the current appeal is in fact against a different assessment, that HMRC repaid the VAT before issuing the assessment and that BIOT has made a successful application for hardship in relation to this appeal, BIOT’s failure to prosecute its original appeal more diligently does not persuade me that the current appeal should be struck out as an abuse of process.”
For completeness, the FTT also considered a stricter approach, considering whether the appellant’s earlier actions had been inexcusable and decided that they had not been, and thus the appeal should not be struck out on this basis either.
An argument that the appeal should be dismissed as it had no realistic chance of success was also rejected as the FTT judged that it was necessary to consider the validity of disputed invoices and that these might establish that the appeal was still within time. In respect of the penalty, HMRC had maintained that an invoice provided was false and as such it was indisputable that a dishonesty penalty applied. However, HMRC had failed to include the evidence for this in their bundle, so the the FTT had judged that this was currently inadmissible and that:
“even if this evidence had been produced at the correct time, it would not in my view be appropriate, save in the clearest of cases, to make a finding of dishonesty without a full hearing at which all of the evidence would be available as to circumstances in which the invoice was produced and BIOT’s thinking when it was provided to HMRC, including any relevant witness evidence which could then be tested by cross-examination.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/651
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