ON APPEAL FROM THE HIGH COURT OF JUSTICE
The Hon. Mr Justice Simon
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
LORD NEUBERGER, MASTER OF THE ROLLS
LADY JUSTICE ARDEN
and
LORD JUSTICE MOSES
Between :
The Queen on The Application of Totel Ltd | Appellant |
- and - | |
The First-Tier Tribunal (Tax Chamber) and The Commissioners for Her Majesty’s Revenue and Customs | Respondents |
(Transcript of the Handed Down Judgment of
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Mr Kieron Beal QC (instructed by Aegis Tax Llp) for the Appellant
Mr Jonathan Swift QC and Ms Rachel Kamm (instructed by The General Counsel and Solicitor to HM Revenue and Customs) for the Respondents
Hearing dates: 24th-25th July, 2012
Judgment
Lord Justice Moses:
The first question in this appeal is whether the power to make provision by statutory instrument conferred by s.124 of the Finance Act 2008 included the power to abolish a statutory right to appeal to the Upper Tribunal from a decision of the First-tier Tribunal. That statutory right had been conferred by s.11(2) of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007), which came into force on 3 November 2008. In judicial review proceedings, ([2012] QB 358, [2011] EWHC 652 (Admin)) Simon J held that s.124 successfully conferred such a power and dismissed Totel Limited’s legal challenge to the decision of the First-tier Tribunal. That Tribunal had, in relation to two tax appeals, dismissed Totel’s applications that it should be relieved of the obligation to pay the tax in issue before those appeals were entertained. I set out all the relevant legislation in my annexe to this judgment.
The chronology is of importance. The Commissioners sought to recover input tax paid to the appellant, Totel, in the periods 01/06 and 03/06. For that purpose they raised an assessment for the first period, under s.73(2) of the Value Added Tax Act 1994 by letter dated 3 October 2006, reclaiming £205,625.
Totel had a right of appeal to a VAT Tribunal against the first assessment under s.83 (p) of the VATA 1994. But such a appeal could not be entertained unless the amount which the Commissioners had determined to be payable had been paid or deposited or the Commissioners or the VAT Tribunal were satisfied that Totel would suffer hardship were it to pay or deposit such an amount (s.84(3) VATA 1994).
Totel appealed the first assessment on 15 December 2006, and in its notice of appeal sought a direction that hardship would be caused if it paid the sum in question. By 4 January 2007 the Commissioners had made it clear that they did not agree hardship would be caused, and, accordingly, Totel required a decision from the Tribunal as to hardship before it could pursue its appeal against the assessment. The history of the delay in mounting a hearing for such a decision has been fully set out in the decision of the First-tier Tribunal of 11 May 2009. Had the Tribunal been able to reach a conclusion as to hardship before 3 November 2008, and if it had been adverse to Totel, Totel would have had a right of appeal on a point of law to the High Court by virtue of s.11 of the Tribunals and Inquiries Act 1992.
For the second period, 03/06, HMRC raised an assessment for £1.2 million on 10 November 2008. Totel exercised its right of appeal, under s. 83(p), against the second assessment on 26 November 2008, and again sought a direction that hardship would be caused. S.3 of the Tribunal Courts and Enforcement Act 2007 provided that there “were to be” tribunals known as the First-tier and Upper Tribunals for the purpose of exercising the functions of, amongst other bodies the existing VAT Tribunal. Section 3 had been brought into force on 3 November 2008, twenty-three days before Totel’s appeal against the second assessment (s.148(5) and Art 2 TCEA 2007 Commencement No 6 and Transitional Provisions Order 2008 (2008/2696)). But it should be observed that the functions of a “scheduled” tribunal such as the VAT Tribunal were not to be transferred to the new tribunal until the Lord Chancellor had made an order for that purpose (s.30 TCEA 2007), at which point he could, by order abolish the existing tribunal (s.31 TCEA 2007).
Accordingly, Totel’s appeal against the second assessment was made to a VAT Tribunal whose functions were not transferred in November 2008. HMRC objected to Totel’s hardship application by notice of 9 December 2008. Had a hearing in relation to Totel’s assertion of hardship been convened before 1 April 2009, it would have been heard by a VAT Tribunal. S.11 of the TCEA 2007 was brought into force on 3 November 2008 (Art 2 of 2008/2696). S. 11 conferred a right of appeal to the Upper Tribunal on a point of law, “arising from a decision made by the First-tier Tribunal”. This is the statutory right of appeal at the heart of this part of the instant appeal.
But on 1 April 2009 that statutory right was removed by the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (2009/56). Totel’s appeals against both assessments, coupled with its application for a direction that the appeal should be considered without payment of the tax in dispute were “current proceedings” within the meaning of Paragraph 1(2) of Schedule 3 of the Transfer Order 2009 because Totel had served notice for the purpose of beginning proceedings before the “existing tribunal”, as the VAT Tribunal is described in Art.2 (c) of the Transfer Order. By Art.6 such current proceedings were to continue on and after 1 April as proceedings before the First-tier Tribunal (according to the definition of tribunal in Art. 1(1)).
Had the VAT Tribunal reached an adverse decision in relation to the s.73(2) VAT assessments before 1 April 2009, then there would have been a right of appeal on a point of law to the Upper Tribunal (paragraph 11 (1)(a) and 11(2) of Schedule 3 to the Transfer Order). But had the VAT Tribunal reached an adverse decision in relation to the hardship application before 1 April 2009, paragraph 11(2) of the Transfer Order provides that there is no greater right of appeal than that which lies from the decision of a First-tier Tribunal after 1 April 2009. A decision of the First-tier Tribunal in relation to a hardship application after 1 April 2009, even if it was a decision in current proceedings would, if the relevant provisions (paragraph 221(5) of the Transfer Order) are lawful, be final.
These are the consequences of a combination of Art.3, Paragraph 221 of Schedule 1 and (in the event that the decision in relation to hardship had been made before 1 April 2009) Paragraph 11 (2) of Schedule 3 of the Transfer Order.
Art. 3 (1)(a) introduces Schedule 1 which, so it says:
“contains amendments to primary legislation which –
(a) transfer functions of existing tribunals and
(b) make consequential and other provision (including provision about reviews of decisions by (HMRC))”
Paragraph 221 of Schedule 1 makes provision in relation to appeals by amendment to Section 84 of the VATA 1994. The requirement to pay or deposit tax in issue is broadly the same as that previously contained in s.84(3), save in the crucial respect that the decision of a First-tier Tribunal is said to be final. The newly inserted sections, s.84(3B) and (3C) provide:
“(3B) In a case where the amount determined to be payable as VAT or the amount notified by the recovery assessment has not been paid or deposited an appeal shall be entertained if— (a) HMRC are satisfied (on the application of the appellant), or (b) the tribunal decides (HMRC not being so satisfied and on the application of the appellant), that the requirement to pay or deposit the amount determined would cause the appellant to suffer hardship.
(3C) Notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the tribunal as to the issue of hardship is final.”
Paragraph 11(2) applies the finality of a decision of the First-tier Tribunal on hardship to a decision of the VAT Tribunal made before 1 April 2009 :
“ …such rights of appeal shall lie from the decision (of an existing tribunal) as would lie from a decision of the First-tier Tribunal made on or after that date”.
The essential question is whether there was power to provide in the Transfer Order that the decision of the First-tier tribunal on the hardship application was final. Resolution of this question turns on the provisions of the statute, the Finance Act 2008 which, so HMRC contends, conferred the power to declare such a decision final.
I should emphasise that the power, if it exists, is not contained in s.11 of the TCEA 2007 itself. S.11(1) applies to all decisions of the First-tier Tribunal other than excluded decisions. A decision as to hardship is not an “excluded decision” within s.11 (5) and by virtue of s.11 (6) could not be so specified.
S.124 of the Finance Act 2008 provides:
“(1) The Treasury may by order made by statutory instrument make provision –
(a) for and in connection with reviews by the commissioners, or by an officer of Revenue and Customs, of HMRC decisions, and
(b) in connection with appeals against HMRC decisions.
(2) An order under subsection (1) may, in particular, contain provision about -
(a) the circumstances in which, or the time within which –
(i) a right to a review may be exercised, or
(ii) an appeal may be made, and (b) the circumstances in which, or the time at which, an appeal or review is, or may be treated as, concluded.
(6) Provision under subsection (1) may be made by amending, repealing or revoking any provision of any Act or subordinate legislation (whenever passed or made, including this Act and any Act amended by it).
(8) A statutory instrument containing an order under subsection (1) may not be made unless a draft of it has been laid before and approved by resolution of the House of Commons.”
Absent the introduction of s.84(3C) into VATA 1994 by paragraph 221(5) of Schedule 1 of the Transfer Order 2009, Totel would have had a right of appeal to the Upper Tribunal under s.11 of the TCEA 2007 from a decision of the First-tier Tribunal in relation to hardship. Paragraph 221(5) purports to remove that right and does so, as s.84(3C) records, notwithstanding the provisions of s.11 of the TCEA 2007. The question is whether that amendment to s.11 can be achieved by the delegated legislation within the Transfer Order 2009. Resolution of that question turns on whether the words conferring that power are sufficiently clear.
The principle which should be applied is set out in plain terms in R (Spath Holme Ltd) v Secretary of State for Transport, the Environment and Regions [2000] 3 WLR 141:
“Parliament does not lightly take the exceptional course of delegating to the executive the power to amend primary legislation. When it does so the enabling power should be scrutinised, should not receive anything but a narrow and strict construction and any doubts about its scope should be resolved by a restrictive approach”.[35]
The purpose of the requirement that the statute which purports to confer a power to amend primary legislation by delegated legislation should use clear words is obvious. Parliament should be told, in clear terms, if the executive intends to amend primary legislation. As Lord Hoffmann observed, in the context of the purported removal of a fundamental right, if clear words are not used, the full implication and width of the power may pass unnoticed in the democratic process (R v Home Secretary, Ex.p Simms [2000] 2 AC 115, 131E-F and R (Orange Personal Communications) v Secretary of State for Trade and Industry [2001] 3 CMLR 36 per Sullivan J at [70]).
Does s.124 of the Finance Act 2008 contain words of sufficient clarity to forewarn that a right of appeal from First-tier Tribunal to Upper Tribunal was to be withdrawn? There can be no dispute as to the manner in which the power may be exercised. Provisions may amend repeal or revoke any provision of any Act (S.124 (6)). But the point is not the manner in which the power may be exercised but the matter for which provision may be made.
The question turns on whether a provision made for revoking the right of appeal from the decision of a First-tier Tribunal to the Upper Tribunal in relation to a decision as to hardship is a “provision….in connection with appeals against HMRC decisions”.
The paradigm of such a provision is contained within s.124 itself. S.124(2) confers power “in particular” to make provision about the circumstances in which an appeal may be made. The reference to an appeal is clearly a reference to appeals under s.83 VATA 1994. The circumstances in which such appeals may be made clearly include those provisions within s.84, under the rubric “Further provisions relating to appeals”, such as the provision requiring the tax in dispute to be paid before the appeal may be entertained. Accordingly, those provisions in Paragraph 221 of the Transfer Order which omit s.84(2) and substitute s.84(3),(3A) and insert (3B) are all provisions which make provision about the circumstances in which, for example, an appeal against an assessment under s.83(p) may be made.
But a provision which revokes or removes a right of appeal does not seem to me properly to be described as a provision about the circumstances in which an appeal may be made. The decision of the First-tier Tribunal as to whether a taxpayer would suffer hardship if it was required to pay the tax in issue is a decision in relation to the circumstances in which an appeal may be made but is not, as is clear from the terms of s.84(3B) and its predecessor (3)(b), itself an appeal. A provision in relation to the circumstances in which an appeal may be made pre-supposes the existence of a right of appeal not its abolition.
S.124(2) is, of course, only an example of the matters with which s.124 provisions may deal. S.124(1)(b) may have a wider reach. But the provision in paragraph 221(5) which revokes the right of appeal from the decision of the First-tier Tribunal to the Upper Tribunal, conferred by s.11 TCEA 2009, is not a provision in connection with appeals against HMRC decisions. The impact of the meaning of “in connection “ is reinforced by the contrast with the preceding subsection s.124(1)(a) where the phrase “for and in connection with” is used. (Provisions made under that sub-section do create, in certain circumstances, rights of review). That contrast suggests that that which is envisaged in s.124(1)(b), where the word for is omitted, is provision as to the circumstances in which an appeal may be entertained rather than provisions which create or remove rights of appeal.
As I have recalled, the decision of the First-tier Tribunal as to hardship is not an appeal against an HMRC decision. Paragraph 221(5) is a provision in relation to an appeal from a First-tier tribunal decision to the Upper Tribunal. A provision in connection with an appeal pre-supposes the existence of an appeal not the revocation or abolition of a right of appeal.
Nor does s.124(2)(b) assist. Since the decision of the First-tier Tribunal is not an appeal, the provision in paragraph 221(5) which makes the decision final is not a provision about the circumstances in which an appeal is or may be treated as concluded. That again pre-supposes the existence of a right of appeal.
A benevolent construction might, at a stretch, include, within the meaning of a “provision as to the circumstances in which an appeal may be made”, the abolition of a right of appeal where the subject-matter is the circumstances in which an appeal may be entertained. It might even, at a stretch, include, within the meaning of a provision “in connection with an appeal against an HMRC decision”, abolition of the right of appeal against a decision of the First-tier tribunal, where that subject-matter is in issue. But the need for clear words precludes any such benevolence.
I conclude that s.124 did not give a power to revoke the right of appeal, conferred by s. 11 of TCEA 2009, from the First-tier Tribunal to the Upper Tribunal in relation to hardship decisions. Paragraph 221(5) is ultra vires.
I have reached this conclusion on the basis that the wording of s.124 of the Finance Act 2008 does not clearly confer the power to revoke the right of appeal from First-tier Tribunal to Upper Tribunal in relation to hardship applications. Mr Beal QC, for Totel Ltd argued that the attempt to revoke the right of appeal failed for two other reasons. First, he contended that the specific right to appeal conferred by s.11 TCEA 2007 could not be cut down by subordinate legislation made under a power conferred by a different statute, the Finance Act 2008. For that proposition he relied on R v Secretary of State for Social Security ex p Joint Council for the Welfare of Immigrants [1997] 1 WLR 275 in which Simon Brown LJ made the unqualified statement:
“Specific statutory rights are not to be cut down by subordinate legislation passed under the vires of a different Act. So much is clear [290A-B]”. (and to the same effect see Waite LJ 293E)
But JCWI and Mercury Personal Communications v Secretary of State for Trade and Industry [2000] UKCLR 143, in which Mummery LJ (at 151F) endorsed this principle, whilst concluding it had no application in that case, are miles away from this case. In JCWI asylum seekers’ rights of application and appeal conferred by primary legislation were rendered nugatory by regulations restricting their right to urgent benefits. But provided the power conferred by one statute to amend the provisions of another by delegated legislation is clear and express so that it is plain that Parliament understood the nature and scope of the power it was conferring on the executive, there is no reason in principle why the statute should not do so.
The true principle is that expressed in Bennion on Statutory Construction (5th Edn. Section 81 p.293-4):
“An Act may confer power for the amendment of itself or another Act by delegated legislation. An amendment made by the use of such a power is as effective as if made directly by an Act.”
Bennion acknowledges the need to ensure that the delegated legislation is not ultra vires whilst criticising judicial expressions of disapproval of this process. There is no need, in the instant case, to express any disapproval: had the words in the Finance Act 2008 been sufficiently clear, the rules in the Transfer Order of 2009 could have achieved their purpose.
As a second basis of objection, Mr. Beal contended that the Transfer Order deprived Totel of a fundamental right to appeal. He did so in order to invoke the principle expressed in ex p. Simms (q.v.supra) and R v Secretary of State for the Home Dept. ex p Pierson [1998] AC 539 that clear words would be needed to remove a fundamental right. But I agree with Simon J [30] that no fundamental right is in play here. It is highfaluting to describe a right of appeal from the decision of the First-tier Tribunal to the Upper tribunal in relation to a hardship application as a fundamental right, analogous to freedom of expression, or access to justice. The right is a right to appeal, only with permission on a point of law. Since judicial review is available, Totel was not deprived of a very great deal: at most, a hearing before a specialist tribunal able to substitute its own view, should an error of law be disclosed, whereas the Administrative Court on judicial review would be far more likely merely to quash the decision and send it back to the First-tier Tribunal.
I should, however, since I have the misfortune to differ from Simon J in his conclusion, mention the passage which followed his correct dismissal of the submission that a fundamental right was denied to Totel. He concluded that, even if a fundamental right was at stake :
“it is difficult to conceive of clearer or more emphatic words than those used in s.84(3C):
‘Notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the tribunal as to the issue of hardship is final’.”
But s.84(3C) is not the source of the power to make the delegated legislation in issue. That source was s.124 of the Finance Act 2008 and it is to that section it is necessary to look to identify the width and extent of the power. The judge’s error may only be a slip of the pen and an erroneous statutory reference. S.84(3C) echoes s.124(6) which certainly does confer a power to amend primary legislation; but s.124(6) says nothing about what may be amended. That is described in s.124(1) and (2). S.84(3C) was introduced in the purported exercise of the power under the Finance Act 2008, it is irrelevant to the issue of vires.
Equally irrelevant is the evidence of the executive’s misapprehension as to a pre-existing right of appeal, described by Simon J in his judgment [17] and [24]. Either s.124 Finance Act 2008 conferred power to amend s.11 TCEA 2007 or it did not. It may have been a very good idea had it done so, but that does not assist.
I have seen the judgment of Arden LJ. Since no-one else spotted the point on retrospectivity, we have heard no submissions on the issue. So although it sounds right to me, I have not felt able, despite my admiration for her eagle-eyes, to express any explicit agreement with it.
For the reasons I have given I would allow Totel’s appeal and hold that it is entitled to appeal to the Upper Tribunal against the ruling as to hardship. I would rule that the insertion of s.84(3C) by paragraph 221(5) was ultra vires. Since I have reached that view I shall say nothing as to whether Totel has any greater chance of success before the Upper Tribunal than it had before Simon J in establishing any error of law.
Lady Justice Arden:
I agree with the judgment of Moses LJ. For the reasons he gives, the enabling power in section 124 of the Finance Act 2008 is simply not sufficiently clear to confer power to remove a right of appeal in existing proceedings.
Totel certainly lost rights of appeal in this case, though the source of those rights is open to debate. Paragraph 221(5) of schedule 1 to the Transfer Order (as defined by Moses LJ) came into force on 1 April 2009 simultaneously with the transfer of the jurisdiction of the VAT tribunal to the First-tier Tribunal. On that basis, what came to an end as a result of the Transfer Order was the right of appeal by way of case stated to the High Court conferred by section 11 of the Tribunals and Inquiries Act 1992, and paragraph 44 of schedule 1 to that Act, rather than the right of appeal conferred by section 11 of the TCEA (as defined by Moses LJ), which never applied to hardship applications. On either analysis, the effect of the application of the Transfer Order to VAT tribunals was to bring to an end a right of appeal which existed before the transfer of the jurisdiction of the VAT tribunal to the First-tier tribunal.
Apart from the reasons given by Moses LJ, there is another potential objection to the removal of the right of appeal in this case, and that objection is based on retrospectivity. As counsel did not address this point, I only express provisional views, but the point is important for the future for statutory drafting purposes. To bring to an end a right of appeal in existing proceedings has been held to constitute retrospective legislation even where the decision sought to be appealed has not yet been made and the right has not in that sense crystallised: see the terse advice of the Privy Council given by Lord Macnaghten in Colonial Sugar Refining Co Ltd v Irving [1905] AC 360. That decision held ineffective for the purposes of pending proceedings an attempt by statute to abolish the right of appeal to the Privy Council from the Supreme Court of Queensland, after the institution of the High Court of Australia. In that case, the proceedings were pending before the Supreme Court of Queensland when the statute received Royal Assent, but no judgment had then been given. The Privy Council held that a right of appeal in pending proceedings was not a mere matter of procedure which could be altered with retrospective effect without express words or necessary implication.
As Lord Rodger explained with great clarity in Wilson v First County Trust [2004] 1 AC 816, there is a presumption that Parliament did not intend to enact retrospective legislation, and, accordingly, under the principles relating to retrospective legislation also, clear wording in section 124 would be necessary to confer the power to remove of a right of appeal in existing proceedings. The implications are these. First, even if section 124 empowered the Treasury to make an order amending rights of appeal, it might still not empower the removal of the right of appeal in a case such as this. That would depend on the clarity of the words used. Second, had section 124 extended to amending rights of appeal but the Treasury wished fully to avoid retrospective effect, it could have done so by suitable transitional provisions. However, limited transitional provisions applying only to decisions before the commencement date, as in this case, would not fully avoid retrospectivity: see the Colonial Sugar Refining case above.
Viewed from the perspective of retrospectivity and access to court, in my judgment, the removal of the right of appeal involves interference with a fundamental right.
It is unnecessary to express any view on the other grounds of appeal argued by Mr Beal.
I would therefore also allow the appeal, and hold that the insertion of section 84(3C) of the VATA 1994 by paragraph 221(5) of schedule 1 to the Transfer Order was ultra vires section 124 of the Finance Act 2008.
Master of the Rolls, Lord Neuberger:
I agree with what Moses LJ says in his judgment, and I also agree with the additional remarks in the judgment of Arden LJ. There is nothing which I can usefully add.
ANNEX
Statutory Provisions
Value Added Tax Act 1994:
73 Failure to make returns etc.
(2) In any case where, for any prescribed accounting period, there has been paid or credited to any person -
(a) as being a repayment or refund of VAT, or
(b) as being due to him as a VAT credit,
an amount which ought not to have been so paid or credited, or which would not have been so paid or credited had the facts been known or been as they later turn out to be, the Commissioners may assess that amount as being VAT due from him for that period and notify it to him accordingly.
83 Appeals.
Subject to section 84, an appeal shall lie to a tribunal with respect to any of the following matters -
(p) an assessment –
(i) under section 73(1) or (2) in respect of a period for which the appellant has made a return under this Act; or
84 Further provisions relating to appeals.
(1) References in this section to an appeal are references to an appeal under section 83.
(3) Where the appeal is against a decision with respect to any of the matters mentioned in section 83(b), (n), (p) or (q) it shall not be entertained unless-
(a) the amount which the Commissioners have determined to be payable as VAT has been paid or deposited with them; or
(b) on being satisfied that the appellant would otherwise suffer hardship the Commissioners agree or the tribunal decides that it should be entertained notwithstanding that that amount has not been so paid or deposited.
Tribunals and Inquiries Act 1992
11 Appeals from certain tribunals
(1) Subject to subsection (2), if any party to proceedings before any tribunal specified in paragraph 8, [F115(a) or (d)], 16 F2. . ., 24, 26, 31, 33(b), 37 [F3, 40A], 44 or 45 of Schedule 1 is dissatisfied in point of law with a decision of the tribunal he may, according as rules of court may provide, either appeal from the tribunal to the High Court or require the tribunal to state and sign a case for the opinion of the High Court.
(10) In this section “decision” includes any direction or order, and references to the giving of a decision shall be construed accordingly.
Tribunal Courts and Enforcement Act 2007.
3 The First-tier Tribunal and the Upper Tribunal
(1) There is to be a tribunal, known as the First-tier Tribunal, for the purpose of exercising the functions conferred on it under or by virtue of this Act or any other Act.
(2) There is to be a tribunal, known as the Upper Tribunal, for the purpose of exercising the functions conferred on it under or by virtue of this Act or any other Act.
11 Right to appeal to Upper Tribunal
(1) For the purposes of subsection (2), the reference to a right of appeal is to a right to appeal to the Upper Tribunal on any point of law arising from a decision made by the First-tier Tribunal other than an excluded decision.
(2) Any party to a case has a right of appeal, subject to subsection (8).
(3) That right may be exercised only with permission (or, in Northern Ireland, leave).
(4) Permission (or leave) may be given by -
(a) the First-tier Tribunal, or
(b) the Upper Tribunal,
on an application by the party.
(5) For the purposes of subsection (1), an “excluded decision” is -
(a) any decision of the First-tier Tribunal on an appeal made in exercise of a right conferred by the Criminal Injuries Compensation Scheme in compliance with section 5(1)(a) of the Criminal Injuries Compensation Act 1995 (c. 53) (appeals against decisions on reviews),
(b) any decision of the First-tier Tribunal on an appeal under section 28(4) or (6) of the Data Protection Act 1998 (c. 29) (appeals against national security certificate),
(c) any decision of the First-tier Tribunal on an appeal under section 60(1) or (4) of the Freedom of Information Act 2000 (c. 36) (appeals against national security certificate),
(d) a decision of the First-tier Tribunal under section 9 -
(i) to review, or not to review, an earlier decision of the tribunal,
(ii) to take no action, or not to take any particular action, in the light of a review of an earlier decision of the tribunal,
(iii) to set aside an earlier decision of the tribunal, or
(iv) to refer, or not to refer, a matter to the Upper Tribunal,
(e) a decision of the First-tier Tribunal that is set aside under section 9 (including a decision set aside after proceedings on an appeal under this section have been begun), or
(f) any decision of the First-tier Tribunal that is of a description specified in an order made by the Lord Chancellor.
(6) A description may be specified under subsection (5)(f) only if –
(a) in the case of a decision of that description, there is a right to appeal to a court, the Upper Tribunal or any other tribunal from the decision and that right is, or includes, something other than a right (however expressed) to appeal on any point of law arising from the decision, or
(b) decisions of that description are made in carrying out a function transferred under section 30 and prior to the transfer of the function under section 30(1) there was no right to appeal from decisions of that description.
(7) Where -
(a) an order under subsection (5)(f) specifies a description of decisions, and
(b) decisions of that description are made in carrying out a function transferred under section 30, the order must be framed so as to come into force no later than the time when the transfer under section 30 of the function takes effect (but power to revoke the order continues to be exercisable after that time, and power to amend the order continues to be exercisable after that time for the purpose of narrowing the description for the time being specified).
(8) The Lord Chancellor may by order make provision for a person to be treated as being, or to be treated as not being, a party to a case for the purposes of subsection (2).
30 Transfer of functions of certain tribunals
(1) The Lord Chancellor may by order provide for a function of a scheduled tribunal to be transferred –
(a) to the First-tier Tribunal,
(b) to the Upper Tribunal,
(c) to the First-tier Tribunal and the Upper Tribunal with the question as to which of them is to exercise the function in a particular case being determined by a person under provisions of the order,
(d) to the First-tier Tribunal to the extent specified in the order and to the Upper Tribunal to the extent so specified,
(e) to the First-tier Tribunal and the Upper Tribunal with the question as to which of them is to exercise the function in a particular case being determined by, or under, Tribunal Procedure Rules,
(f) to an employment tribunal,
(g) to the Employment Appeal Tribunal,
(h) to an employment tribunal and the Employment Appeal Tribunal with the question as to which of them is to exercise the function in a particular case being determined by a person under provisions of the order, or
(i) to an employment tribunal to the extent specified in the order and to the Employment Appeal Tribunal to the extent so specified.
(2) In subsection (1) “scheduled tribunal” means a tribunal in a list in Schedule 6 that has effect for the purposes of this section.
(3) The Lord Chancellor may, as respects a function transferred under subsection (1) or this subsection, by order provide for the function to be further transferred as mentioned in any of paragraphs (a) to (i) of subsection (1).
(4) An order under subsection (1) or (3) may include provision for the purposes of or in consequence of, or for giving full effect to, a transfer under that subsection.
(5) A function of a tribunal may not be transferred under subsection (1) or (3) if, or to the extent that, the provision conferring the function -
(a) would be within the legislative competence of the Scottish Parliament if it were included in an Act of that Parliament, or
(b) would be within the legislative competence of the Northern
Ireland Assembly if it were included in an Act of that Assembly.
(6) Subsection (5) does not apply to -
(a) the Secretary of State's function of deciding appeals under section 41 of the Consumer Credit Act 1974 (c. 39),
(b) functions of the Consumer Credit Appeals Tribunal,
(c) the Secretary of State's function of deciding appeals under section 7(1) of the Estate Agents Act 1979 (c. 38), or
(d) functions of an adjudicator under section 5 of the Criminal Injuries Compensation Act 1995 (c. 53) (but see subsection (7)).
(7) Functions of an adjudicator under section 5 of the Criminal Injuries Compensation Act 1995 (c. 53), so far as they relate to Scotland, may be transferred under subsection (1) or (3) only with the consent of the Scottish Ministers.
(8) A function of a tribunal may be transferred under subsection (1) or (3) only with the consent of the Welsh Ministers if any relevant function is exercisable in relation to the tribunal by the Welsh Ministers (whether by the Welsh Ministers alone, or by the Welsh Ministers jointly or concurrently with any other person).
(9) In subsection (8) “relevant function”, in relation to a tribunal, means a function which relates -
(a) to the operation of the tribunal (including, in particular, its membership, administration, staff, accommodation and funding, and payments to its members or staff), or
(b) to the provision of expenses and allowances to persons attending the tribunal or attending elsewhere in connection with proceedings before the tribunal.
31 Transfers under section 30: supplementary powers
(1) The Lord Chancellor may by order make provision for abolishing the tribunal by whom a function transferred under section 30(1) is exercisable immediately before its transfer.
(2) The Lord Chancellor may by order make provision, where functions of a tribunal are transferred under section 30(1), for a person -
(a) who is the tribunal (but is not the Secretary of State), or
(b) who is a member of the tribunal, or
(c) who is an authorised decision-maker for the tribunal,
to (instead or in addition) be the holder of an office specified in subsection (3).
(3) Those offices are -
(a) transferred-in judge of the First-tier Tribunal,
(b) transferred-in other member of the First-tier Tribunal,
(c) transferred-in judge of the Upper Tribunal,
(d) transferred-in other member of the Upper Tribunal, and
(e) deputy judge of the Upper Tribunal.
(4) Where functions of a tribunal are transferred under section 30(1), the Lord Chancellor must exercise the power under subsection (2) so as to secure that each person who immediately before the end of the tribunal's life -
(a) is the tribunal,
(b) is a member of the tribunal, or
(c) is an authorised decision-maker for the tribunal,
becomes the holder of an office specified in subsection (3) with effect from the end of the tribunal's life (if the person is not then already the holder of such an office).
(5) Subsection (4) does not apply in relation to a person -
(a) by virtue of the person's being the Secretary of State, or
(b) by virtue of the person's being a Commissioner for the general purposes of the income tax;
and a reference in subsection (4) to the end of a tribunal's life is to when the tribunal is abolished or (without being abolished) comes to have no functions.
(6) For the purposes of this section, a person is an “authorised decision-maker” for a tribunal if -
(a) the tribunal is listed in column 1 of an entry in the following Table, and
(b) the person is of the description specified in column 2 of that entry.
148 Commencement
(1) Section 60 comes into force at the end of the period of two months beginning with the day on which this Act is passed.
(2) The provisions of Chapter 3 of Part 5 come into force in accordance with provision made by the Lord Chancellor or the Secretary of State by order.
(3) The provisions of Part 6 come into force, except as provided by subsection (4), in accordance with provision made by the Secretary of State by order.
(4) The provisions of Part 6 come into force, in so far as they extend to Scotland, in accordance with provision made by the Scottish Ministers by order.
(5) The remaining provisions of this Act, except sections 53, 55, 56, 57, 145, 147, 149, this section and Schedule 11, come into force in accordance with provision made by the Lord Chancellor by order.
(6) An order under this section may make different provision for different purposes.
(7) The power to make an order under this section is exercisable by statutory instrument.
Finance Act 2008
124 HMRC decisions etc: reviews and appeals
(1) The Treasury may by order made by statutory instrument make provision -
(a) for and in connection with reviews by the Commissioners, or by an officer of Revenue and Customs, of HMRC decisions, and
(b) in connection with appeals against HMRC decisions.
(2) An order under subsection (1) may, in particular, contain provision about -
(a) the circumstances in which, or the time within which—
(i) a right to a review may be exercised, or
(ii) an appeal may be made, and
(b) the circumstances in which, or the time at which, an appeal or review is, or may be treated as, concluded.
(3) An order under subsection (1) may, in particular, contain provision about the payment of sums by, or to, the Commissioners in cases where -
(a) a right to a review is exercised, or
(b) an appeal is made or determined.
(4) That includes provision about payment of sums where an appeal has been determined, but a further appeal may be or has been made, including provision -
(a) requiring payments to be made,
(b) enabling payments to be postponed, or
(c) imposing conditions in connection with the making or postponement of payments.
(5) An order under subsection (1) may, in particular, contain provision about interest on any sum that is payable by, or to, the Commissioners in accordance with a decision made on the determination of an appeal.
(6) Provision under subsection (1) may be made by amending, repealing or revoking any provision of any Act or subordinate legislation (whenever passed or made, including this Act and any Act amended by it).
(7) An order under subsection (1) may—
(a) provide that any provision contained in the order comes into force on a day appointed by an order of the Treasury made by statutory instrument (and may provide that different days may be appointed for different purposes),
(b) contain incidental, supplemental, consequential, transitional, transitory and saving provision, and
(c) make different provision for different purposes.
(8) A statutory instrument containing an order under subsection (1) may not be made unless a draft of it has been laid before and approved by resolution of the House of Commons.
(9) But if the order, or any other order under subsection (1) contained in the statutory instrument, is made in connection with a transfer of functions carried out under the Tribunals, Courts and Enforcement Act 2007 (c. 15), the statutory instrument may only be made if a draft of it has been laid before and approved by resolution of each House of Parliament.
(10) In this section -
(a) references to appeals against HMRC decisions include any other kind of proceedings relating to an HMRC matter, and
(b) references to the making, determination or conclusion of appeals are to be read accordingly.
(11) In this section -
“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
“HMRC decision” means -
(a) any decision of the Commissioners relating to an HMRC matter, or
(b) any decision of an officer of Revenue and Customs relating to an HMRC matter, and references to an HMRC decision include references to anything done by such a person in connection with making such a decision or in consequence of such a decision;
“HMRC matter” means any matter connected with a function of the Commissioners or an officer of Revenue and Customs.
TCEA 2007 Commencement and Transitional Provisions Order 2008
Citation and commencement
2.
Articles 4 and 6 come into force on 1st April 2009. All other provisions come into force on 3rd November 2008.
Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2008
Citation and commencement
1. (1) This Order may be cited as the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009.
(2) This Order comes into force on 1st April 2009.
The existing tribunals
2. In this Order “existing tribunals” means—
(a) the Commissioners for the general purposes of the income tax established under section 2 of the Taxes Management Act 1970(1);
(b) the Commissioners for the special purposes of the Income Tax Acts established under section 4 of the Taxes Management Act 1970;
(c) the VAT and duties tribunals established under Schedule 12 to the Value Added Tax Act 1994(2);
(d) the tribunal established under section 706 of the Income and Corporation Taxes Act 1988(3); and
(e) the tribunal established under section 704 of the Income Tax Act 2007(4).
3. (1) Schedule 1 contains amendments to primary legislation which—
(a) transfer functions of existing tribunals, and
(b) make consequential and other provision (including provision about reviews of decisions by Her Majesty’s Revenue and Customs).
Schedule 3 contains -
(a) transitional provision, and
(b) saving provision.
Omit subsection (2).
(3) For subsection (3) substitute -
“(3) Subject to subsections (3B) and (3C), where the appeal is against a decision with respect to any of the matters mentioned in section 83(1)(b), (n), (p), (q), (ra) or (zb), it shall not be entertained unless the amount which HMRC have determined to be payable as VAT has been paid or deposited with them.”.
(4) For subsection (3A) substitute -
“(3A) Subject to subsections (3B) and (3C), where the appeal is against an assessment which is a recovery assessment for the purposes of this subsection, or against the amount of such an assessment, it shall not be entertained unless the amount notified by the assessment has been paid or deposited with HMRC.”.
(5) After subsection (3A) insert -
“(3B) In a case where the amount determined to be payable as VAT or the amount notified by the recovery assessment has not been paid or deposited an appeal shall be entertained if -
(a) HMRC are satisfied (on the application of the appellant), or
(b) the tribunal decides (HMRC not being so satisfied and on the application of the appellant), that the requirement to pay or deposit the amount determined would cause the appellant to suffer hardship.
(3C) Notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the tribunal as to the issue of hardship is final.”.
(6) In subsection (4) in paragraphs (a) and (b) and in the words following paragraph (c) for “the Commissioners” substitute “HMRC”.
(7) In subsections (4ZA), (4A)(a), (4C), (4D), (7), (7ZA) and (7B) for “the Commissioners” substitute “HMRC”.
(8) In subsections (4ZA)(a), (5), (6), (6A), (6B), (7), (7A), (7ZA) and (7B) for “83” substitute “83(1)”.
(9) In subsection (4E) for “the Commissioners satisfy” substitute “HMRC satisfies”.
(10) Omit subsection (8).
(11) In subsection (9) -
(a) after “section 14” add “or 15A”;
(b) in paragraph (b) for “the Commissioners” substitute “HMRC”;
(c) at the end of paragraph (b) insert “and”; and
(d) after paragraph (b) insert -
“(c) a review is not being undertaken following a request under section 14A of that Act; and
(d) a review is not being undertaken under section 15 of that Act as a consequence of section 15B(3), 15C(3) or 15E(3) of that Act.”.
(12) In subsection (10) -
(a) for “a decision of the Commissioners” substitute “an HMRC decision”;
(b) omit “by them”.
SCHEDULE 3 Transitional and Saving Provisions
General
1. (1) In this Schedule -
“commencement date” means the date on which this Order comes into force;
“enactment” includes subordinate legislation (within the meaning of the Interpretation Act 1978(1));
“HMRC” means Her Majesty’s Revenue and Customs;
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.
(2) For the purposes of this Schedule there are “current proceedings” if, before the commencement date -
(a) any party has served notice on an existing tribunal for the purpose of beginning proceedings before the existing tribunal, and
(b) the existing tribunal has not concluded proceedings arising by virtue of that notice.
Former VAT and duties tribunals matters (except VAT)
2. (1) This paragraph applies in relation to the following decisions -
(a) any relevant decision which HMRC notify before the commencement date, unless -
(i) the period to require a review of the decision has expired before that date, or
(ii) a review of the decision has been required before that date;
(b) any relevant review decision which HMRC notify before the commencement date unless—
(i) the period to serve notice of appeal against the decision on an existing tribunal has expired before that date, or
(ii) notice of appeal against the decision has been served on an existing tribunal before that date.
(2) On and after the commencement date, the following enactments continue to apply (subject to sub-paragraphs (3) and (4)) as they applied immediately before that date -
(a) the review and appeal provisions,
(b) rule 4(2) of the Value Added Tax Tribunals Rules 1986(2), and
(c) any other enactments that apply in relation to relevant decisions or relevant review decisions.
(3) Those enactments apply subject to Tribunal Procedure Rules.
(4) Any reference to an existing tribunal is to be substituted with a reference to the tribunal.
(5) Any time period which has started to run before the commencement date and has not expired will continue to apply.
(6) In this paragraph -
“relevant decision” means a decision to which a review and appeal provision applies (apart from a relevant review decision);
“relevant review decision” means a decision -
(a) that is made on a review of a relevant decision, and
(b) to which a review and appeal provision applies,
and includes a relevant decision that is treated as having been confirmed under a review and appeal provision.
“review and appeal provisions” means -
(a) sections 14 to 16 of the Finance Act 1994(3),
(b) sections 59 and 60 of the Finance Act 1994(4),
(c) sections 54 to 56 of the Finance Act 1996(5),
(d) paragraphs 121 to 123 of Schedule 6 to the Finance Act 2000(6),
(e) sections 40 to 42 of the Finance Act 2001(7),
(f) sections 33 to 37 of the Finance Act 2003(8),
(g) regulations 9 to 13 of the Export (Penalty) Regulations 2003(9),
(h) regulations 4 to 7 of the Control of Cash (Penalties) Regulations 2007(10),
(i) regulations 43 and 44 of the Money Laundering Regulations 2007(11), and
(j) regulations 12 and 13 of the Transfer of Funds (Information on the Payer) Regulations 2007(12).
3. (1) This paragraph applies in relation to a relevant decision if, before the
commencement date -
(a) HMRC have notified the relevant decision, and
(b) a review of the decision has begun under a review and appeal provision (whether or not a relevant review decision has been notified).
(2) On and after the commencement date the following enactments continue to apply (subject to sub-paragraphs (3) and (4)), as they applied immediately before that date -
(a) the review and appeal provisions,
(b) rule 4(2) of the VAT Tribunals Rules 1986, and
(c) any other enactments that apply in relation to relevant decisions or relevant review decisions.
(3) Those enactments apply subject to Tribunal Procedure Rules.
(4) Any reference to an existing tribunal is to be substituted with a reference to the tribunal.
(5) Any time period which has started to run before the commencement date and has not expired will continue to apply.
(6) On and after the commencement date, no notification offering or requiring a review may be given under any review and appeal provision or any other enactments that are applicable to the decision as they apply after that date.
(7) In this paragraph “review and appeal provision”, “relevant decision” and “relevant review decision” have the same meaning as in paragraph 2.
Former VAT and duties tribunals matters: VAT
4. (1) This paragraph applies if, before the commencement date-
(a) HMRC have notified a decision relating to a matter to which section 83 of the Value Added Tax Act 1994(13) applies, and
(b) no party has served notice on a VAT and duties tribunal for the purpose of beginning proceedings before such a tribunal in relation to that decision.
(2) On and after the commencement date, the following enactments continue to apply (subject to sub-paragraphs (3) and (4)) as they applied immediately before that date -
(a) the Value Added Tax Act 1994,
(b) rule 4(2) of the VAT Tribunals Rules 1986, and
(c) any other enactments that are applicable to the decision.
(3) Those enactments apply subject to Tribunal Procedure Rules.
(4) Any reference to an existing tribunal is to be substituted with a reference to the tribunal.
(5) Any time period which has started to run before the commencement date and has not expired will continue to apply.
Matters formerly heard by existing tribunals (except VAT and duties tribunals)
5. (1) This paragraph applies if, before the commencement date—
(a) a notice of appeal has been given to HMRC; but
(b) no party has served notice on an existing tribunal for the purpose of beginning proceedings before the existing tribunal in relation to that appeal.
(2) Where the date on which a review is required or offered falls on or before 31 March 2010, the period for HMRC to give notice of their conclusions for the purposes of the relevant provision is to be 90 days (but without prejudice to any power to agree to a different period).
(3) In this paragraph -
“review” means a review under -
(a) section 49B or 49C of the Taxes Management Act 1970(14),
or
(b) any other enactment which, as amended by this Order, contains provisions corresponding to section 49B or 49C for review to be required or offered;
“relevant provision” means -
(a) in the case of a review under section 49B or 49C of the Taxes Management Act 1970, section 49E(6) of that Act, or
(b) in the case of a review under any other enactment amended by this Order, the provision that corresponds to section 49E(6) of the Taxes Management Act 1970 in relation to that review.
Current proceedings
6. Any current proceedings are to continue on and after the commencement date as proceedings before the tribunal.
7. (1) This paragraph applies to current proceedings that are continued
before the tribunal by virtue of paragraph 6.
(2) Where a hearing before an existing tribunal (except for the Commissioners for the general purposes of the income tax) began before the commencement date but was not completed by that date, the tribunal must be comprised for the continuation of that hearing of the person or persons who began it.
(3) The tribunal may give any direction to ensure that proceedings are dealt with fairly and justly and, in particular, may -
(a) apply any provision in procedural rules which applied to the proceedings before the commencement date; or
(b) disapply any provision of Tribunal Procedure Rules.
(4) In sub-paragraph (3) “procedural rules” means any provision (whether called rules or not) regulating practice or procedure before an existing tribunal.
(5) Any direction or order made or given in proceedings which is in force immediately before the commencement date remains in force on and after that date as if it were a direction or order of the tribunal relating to proceedings before that tribunal.
(6) A time period which has started to run before the commencement date and which has not expired will continue to apply.
(7) An order for costs may only be made if, and to the extent that, an order could have been made before the commencement date (on the assumption, in the case of costs actually incurred after that date, that they had been incurred before that date).
Cases to be remitted by courts
8. Any case to be remitted by a court on or after the commencement date in relation to an existing tribunal shall be remitted to the tribunal.
Decisions of VAT and duties tribunals and courts: interest and payment
9. (1) This paragraph applies in relation to any decision of a VAT and
duties tribunal made before the commencement date.
(2) On and after that date, the following provisions continue to apply as
they applied immediately before that date -
(a) section 84(8) of the Value Added Tax Act 1994 (VAT),
(b) section 60(6) to (8) of the Finance Act 1994(15) (insurance premium tax),
(c) paragraphs 8 and 10 of Schedule 6 to the Finance Act 1994 (air passenger duty),
(d) section 56(3) to (5) of the Finance Act 1996(16) (landfill tax),
(e) paragraph 123(4) to (6) of Schedule 6 to the Finance Act 2000(17) (climate change levy),
(f) section 42(4) to (6) of the Finance Act 2001(18) (aggregates levy),
(g) paragraph 14(4) of Schedule 3 to the Finance Act 2001 (excise and customs).
10. (1) This paragraph applies if an appeal from a decision of a VAT and
duties tribunal, or from a court, is made before the commencement date.
(2) Section 85B(19) of the Value Added Tax Act 1994 does not apply in relation to that decision.
Decisions of existing tribunals: rights of appeal, reviews and irregularities
11. (1) This paragraph applies to a decision of an existing tribunal if,
immediately before the commencement date -
(a) an appeal lies to a court from that decision,
(b) an application may be or has been made to an existing tribunal
seeking a review of that decision, or
(c) the existing tribunal wishes to correct an irregularity.
(2) Except as provided for in sub-paragraph (3), on and after the commencement date such rights of appeal shall lie from the decision as would lie from a decision of the First-tier Tribunal made on or after that date.
(3) Subject to the modifications specified in sub-paragraphs (4) and (5) the following enactments continue to apply for the purposes of a case to be stated, a review, or for correcting an irregularity in respect of any decision of the Commissioners for the general purposes of the income tax made before the commencement date, as if the amendments in this Order had not been made -
(a) sections 56 and 58 of the Taxes Management Act 1970(20),
(b) regulations 17 and 20 to 24 of the General Commissioners (Jurisdiction and Procedure) Regulations 1994(21), and
(c) the General Commissioners of Income Tax (Costs) Regulations 2001(22).
(4) Section 56(6) of the Taxes Management Act 1970(23) is modified so that for “the Commissioners” there is substituted “the tribunal”.
(5) Section 58 of the Taxes Management Act 1970(24) is modified as follows-
(a) omit subsection (2B); and
(b) in subsection (2C) omit “or on an appeal under section 56A of this Act”.
(6) In article 4 of the Tribunals, Courts and Enforcement Act 2007 (Commencement No. 6 and Transitional Provisions) Order 2008(25)
(a) for “section 56 of the 1970 Act (statement of case for opinion of the High Court)” substitute “sections 56(3) and (11) and 58 of the 1970 Act (statement of case for opinion of the High Court) and regulations 17 and 20 to 24 of the General Commissioners (Jurisdiction and Procedure) Regulations 1994 (review of tribunal’s final determination, stated case procedures and correction of irregularities)”; and
(b) after “commenced” insert “, and the amendments to the 1970 Act and the revocation of the General Commissioners (Jurisdiction and Procedure) Regulations 1994(26), the General Commissioners (Jurisdiction and Procedure) (Amendment) Regulations 1999(27), the General Commissioners (Jurisdiction and Procedure) (Amendment) Regulations 2005(28) and the General Commissioners and Special Commissioners (Jurisdiction and Procedure) (Amendment) Regulations 2007(29) (as they relate to the General Commissioners) in the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 had not been made”.