Appeal withdrawn

First-tier Tribunal’s power to increase assessment after appeal withdrawn

The taxpayer made contributions to employee benefit trusts for the benefit of its staff and families. HMRC considered these payments to be earnings and made regulation 80 determinations. The taxpayer appealed to the First-tier Tribunal. HMRC filed its statement of case which stated the determinations were too low and increased the sums assessed. The taxpayer applied to withdraw the appeal. HMRC said it would not accept the withdrawal unless the taxpayer accepted liability. The taxpayer refused but confirmed it was withdrawing the appeals because it was ‘in no financial position to defend itself’. HMRC asked the First-tier Tribunal to confirm the assessments outlined in the statement of case.

The First-tier Tribunal said it did not have the power to increase the assessments. HMRC appealed.

The Upper Tribunal ruled the First-tier Tribunal had erred in law in reaching its conclusion. It not...