New alternative argument refused

This case management decision concerned a new argument raised by HMRC in its skeleton argument. In essence in its original statement of case for the substantive appeal concerning tax arrangements that were found not to work the department alleged that the tax loss had been brought about by the taxpayers’ deliberate conduct. In its skeleton argument a few months later HMRC alleged the loss had been caused by the deliberate conduct of a person acting on the taxpayers’ behalf – this was not contained in the previous statement.

The taxpayers made an application that HMRC should not be permitted to pursue this new argument.

The First-tier Tribunal agreed with the taxpayers that HMRC’s new allegation in the skeleton argument was ‘tantamount’ to introducing a new issue which should have been pleaded in its statement of case.

Referring to CRC v Hicks [2020] STC 254 and Trustees of the Bessie Taube...