HMRC allowed by the Tribunal to rely on documents not previously disclosed on their list

Introduction

In Burton Skip Hire Limited v HMRC [2025] UKFTT 01113 (TC) there was an application (the “Application”) by the Appellant, Burton Skip Hire Limited (“Burton”), for a direction, pursuant to Rule 15(2)(b) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, debarring the Respondents (“HMRC”) from relying on any documents not disclosed on their List of Documents (“LOD”).  Unsurprisingly, HMRC opposed the Application and made a cross-application (the “Cross-Application”) for a direction that those documents (the “Disputed Documents”) be admitted.

 

Background

On 15 May 2024 Burton appealed to the Tribunal against an assessment to Landfill Tax in the sum of £112,596 relating to material deposited at a site in Derbyshire (the “Site”) operated by Liberty Construction Limited (“Liberty”). HMRC filed and served their statement of case on 11 November 2024. The parties exchanged a List of Documents on 23 December 2024.

 

On 29 January 2025 the Tribunal issued case management directions (the “Directions”) to progress the appeal to a hearing. Directions 1 and 2 provided that not later than 14 March 2025 each party should  send or deliver to the other party and the Tribunal a list of documents in its possession or control which that party intends to rely upon and  send or deliver to the other party copies of any documents on that documents list which had not already been provided to the other party and confirm to the Tribunal that they have done so. Witness statements should be exchanged by 11 April 2025.  Direction 4 provided that the Appellant shall ensure that the copy in the documents bundle of the witnesses’ statements shall, where there is a reference to an exhibit in the text, include a hyperlink to that exhibit in the documents bundle.

 

The Appellant filed and served an amended LOD on 14 March 2025. HMRC confirmed that they would rely on the LOD previously served.

 

On 25 April 2025, each party, having been granted an extension of time to do so, provided the other with their witness statements. However, certain documents were not included on HMRC’s LOD but were exhibited to the statements of HMRC’s witnesses, Moses Tettey, an officer of HMRC, and Jason Relf, an officer of the Environment Agency (“EA”).

 

The Appellant challenged the inclusion of these documents, via an e email, of 6 June 2025 and by way of subsequent application to the Tribunal, dated 20 June 2025.

 

The Tribunal summed up the result as follows:

 

“12. Although the parties sought to resolve the issues regarding the Disputed Documents

through correspondence, they were unable to do so. On 20 June 2025 Burton made the

Application.

 

13. HMRC, in their response to the Application, dated 9 July 2025, have stated that the Disputed Documents had been exhibited to the witness statements of Mr Relf and Officer Tettey because they were either not in HMRC’s possession at the time the LOD was produced (in relation to the Disputed Documents exhibited to Mr Relf’s statement as JR5 and JR6) or their relevance only became apparent in the light of the evidence contained in Mr Relf’s and Officer Tettey’s witness statements (in relation to the Disputed Documents exhibited to Mr Relf’s statement as JR1 and exhibited to Officer Tettey’s statement as MT3 –MT7 (inclusive)).

 

14. The appeal is at a fairly early stage. No date has been fixed for the substantive hearing.Also, immediately after the hearing of the Application I issued directions staying the proceedings for 28 days from the date of issue of this decision. This was to enable the parties to either provide the Tribunal with their joint proposals for the onward progression of the appeal to a hearing or, if agreement was not possible, for each party to provide the Tribunal with their own proposed directions.”

 

The decision

The issues for the Tribunal were:

1. Whether a party, in this case HMRC, is entitled to rely on documents in proceedings that it has not included in its LOD;
2. If not, what sanction (if any) is appropriate; and
3. Whether the Tribunal should admit the Disputed Documents.

 

In this respect the most important Tribunal Rule to consider (Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 was Rule 2,  (the overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly)and the Tribunal’s wide ranging case management powers).

 

The Tribunal set out the relevant principles as set out in the Supreme Court in BPP Holding Ltd and others v HMRC [2017] UKSC 55 (“BPP”).  The Civil Procedure Rules (“CPR”) do not apply to procedure in the Tax Tribunals, however, this did not mean the latter should adopt a different, ie more relaxed, approach to the rules and procedure of the Tribunal.

 

The Tribunal noted that Rule 27, relating to disclosure of documents, suggested a relatively limited level of disclosure under which it is open to a party to decide the documents on which it intends to rely or to produce at the hearing whether to support its own case or to disprove the case as put by the other party. Having said this, all parties are under a duty “to help the Tribunal to further the overriding objective and this obligation must extend to the level of disclosure made by the parties to other parties and to the Tribunal. If the level of disclosure made by a party under rule 27, whilst abiding by the strict terms of the rule falls short of the level that would be required to further the overriding objective, that is a matter that can be addressed by the making of orders or directions under the Tribunal’s case management powers, e.g, to introduce new evidence (see Clark Hill Ltd v HMRC [2018] UKFTT 111 (TC).

 

The Tribunal then commented on the novelty of the issue.

 

“31. I understand that this is the first time that this issue has arisen and the parties have been

unable to locate any authority on point.

 

32. This could be because it is, in my experience, the usual practice of parties when seeking

to rely on additional documents, which have not been included in their LOD, to make an

application to do so…..

 

33. However, the issue before me is not whether the parties should have adopted the usual

practice, but whether, as a matter of law, a party can rely on documents that have not been

included in their LOD.”

 

The Tribunal’s reasoning

The Appellant argued that the Tribunal’s Directions clearly stipulated that the LOD must include all documents that that party intends to rely upon or produce in connection with the appeal. HMRC countered by contending that the Disputed Documents, which were properly exhibited to signed witness statements, were admissible and that it would beincompatible with the overriding objective for the scope of a witnesses’ evidence to be restricted only to those documents included in the LOD and exclude evidence that was either not available or the relevance of which was not appreciated at the time the LOD was produced. Moreover, the exclusion of the Disputed Documents would “reduce the value of evidence” given by the witnesses and risk the Tribunal “reaching a decision on incorrect facts”.

 

The Tribunal concluded as follows:

 

“36. Having considered the Directions, particularly directions 1 and 2, it is clear that it is direction 1 that provides for the production of documents that a party intends to rely upon or produce in connection with the appeal…..Although direction 4 does refer to exhibits to witness statements,there is nothing in that direction to indicate whether such exhibits can comprise new evidence or whether they should be restricted to the documents in the LOD.

 

37….Rule 27 did not require a party to disclose any other documents than those in its LOD….and that should any further documents be required to further the overriding objective, it could be addressed by making directions under Rule 16 or rule 5(3)(d)……. it is clear from Rule 5(3)(d), which provides that the Tribunal may by direction “permit”, ie grant permission to a party to provide documents or information, that a party may make an application to admit new evidence in support of its own case.

 

38. As such a party would have already set out the documents upon which it intended to rely or produce in proceedings under Rule 27 in its LOD, Rule 5(3)(d) must refer to additional documents or material, such as that which was not available or the relevance of which was not appreciated when the LOD was prepared. From this I take that before a party can adduce and rely upon new evidence not included in its LOD, it must first obtain a direction to that effect from the Tribunal.

 

39. Similarly, for consistency if nothing else, the same must also be the case where the admission and reliance on new evidence is sought where the requirement to provide a LOD is contained in directions. This is particularly so in the present case given the similarity between Direction 2 of the Directions and Rule 27. Both require a party to send or deliver to the other party and the Tribunal a list of documents in its possession or control which that party intends to rely upon or produce in the proceedings.

 

40. In the present case, contrary to my conclusion that they were required to do so, HMRC did not apply for a direction to rely on the Disputed Documents but included these as exhibits to the statements of its witnesses. As such, HMRC have failed to comply with the Directions.”

Sanctions

The Tribunal noted that neither Rule 27 nor the Directions contain any provision for a sanction for noncompliance. Under Rule 7(1), any irregularity resulting from a failure to comply with the Rules or a direction does not of itself render void the proceedings or any step taken in them. Having found that HMRC did, in fact, fail to comply with the Directions, it was necessary to consider what level of sanction was appropriate.

 

HMRC argued that, in the absence of any clear statement in the Directions, Rules or any reported authority that it was impermissible for a witness to exhibit documents to their witness statements which had not been included in the LOD, the breach should be waived and the Disputed Documents admitted. The Appellant, however, contended that HMRC should be restricted from relying on the Disputed Documents and any mention of them be removed from the witness statements.

 

The Tribunal stated:

 

“47. Mr McNall (the Appellant’s legal representative)……….contends that there are compelling reasons why the documents should not be admitted, including in particular that:

 

(1) HMRC failed to comply with the Directions;

(2) Contrary to their duty of candour (see Kyriakos Karoulla t/a Brockley’s Rock v HMRC [2018] UKUT 255 (TCC) at [32]), HMRC failed to disclose all relevant material in their possession and control in the LOD.

(3) It would prejudice Burton (which has not had an opportunity to address the documents) and undermine the fairness of the proceedings; and,

(4) It would, having regard to HMRC’s conduct in the proceedings particularly in

relation to disclosure, be just and proportionate for the Tribunal to debar HMRC from relying on the Disputed Documents.

 

48. Essentially all the compelling reasons advanced by Mr McNall concern the fairness of proceedings. Something recognised by HMRC in their guidance ARTG8395 – First-tier and Upper Tribunals: preparing for the tribunal: preparation of statement of case which states:

 

“The purpose of the statement of case is also to tell the customer what HMRC’s case is. So it needs to be comprehensive as the customer will rely on it to prepare their case for the tribunal, including the list of documents. If it is not, HMRC may be depriving the customer of a fair opportunity toassemble evidence in support of their appeal.”

 

49. In addition, Mr McNall refers to HMRC’s conduct in relation to these proceedings, which he contends, particularly in the light of HMRC’s own guidance, is unfair. This is, he says, especially the case in relation to Exhibits MT4, MT5, MT6, MT7, JR1, JR5 and JR6 which were not mentioned in HMRC’s statement of case. Mr McNall also contends that there are issues regarding the availability of Exhibits JR5 and JR6 at the time HMRC provided the LOD given the apparent reference to them being exhibited to the witness statements of EA Officer Jacqueline Berry whose witness statement was included as ‘Document 7’ in HMRC’s LOD. Clearly this would be a matter for cross examination at the substantive hearing and, were HMRC found to have acted unreasonably in relation to these exhibits,could result in a possible application for costs by Burton.

 

50. However, having carefully considered all of the circumstances of the case; the submissions of the parties; and taken into account the overriding objective, I consider that, provided Burton is given an opportunity to respond to them, HMRC should be permitted to adduce and rely on the Disputed Documents. If not, as Judge Greenbank observed in Clark Hill, it “would risk the Tribunal reaching a decision on incorrect facts”.

 

51. In reaching that conclusion I have taken into account that it is accepted that the Disputed Documents are relevant; that the proceedings are at a relatively early stage and no hearing has been listed; and the fact that, as mentioned above (at paragraph 14), directions have been issued staying the proceedings to enable the parties to provide the Tribunal with their agreed proposed case management directions (or, in the absence of agreement, their own proposals) for the further progression of the case which should include provision for Burton to respond to the Disputed Documents.”

 

Conclusion

The decision in Burton Skip Hire reflects a modern trend of ‘procedural rigour’ being enforced not just by the Courts, but increasingly by the Tribunal.  Practitioners will need to be aware of this trap, and make every effort if possible to include all relevant documents in the LOD.  If this is not possible, consideration should be given to filing an application to admit any additional documents as soon as possible and well before any hearing.