With HMRC statistics showing that HMRC was successful (at least in part) in 93% of First-tier Tribunal (FTT) tax cases in 2024/25, many taxpayers will have found themselves wondering what to do following receipt of an unfavourable FTT decision. But the FTT is not the end of the road with the possibility of onwards appeals to the Upper Tribunal, the Court of Appeal and eventually to the Supreme Court. And, in slightly better news for taxpayers, HMRC statistics suggest that HMRC’s chances of success before those higher courts and tribunals are lower (albeit still ranging from 71% to 75% in 2024/25) than before the FTT. 

Yet, the statistics don’t tell us everything so what should you consider before appealing an FTT decision? The lead-up to such a decision has been covered in previous posts in our series on tax disputes in the UK .

Do you have relevant grounds of appeal?

Appeals are generally on a point of law, not fact, so you should consider which category any points that you would ideally appeal fall into. 

• If it is a point of law, you can move on to consider whether your grounds of appeal are likely to satisfy the relevant test for permission to appeal to be granted (see the next question). 
• If it is a question of fact, an appeal is likely to be challenging as the higher courts and tribunals will not generally interfere with findings of fact made by the FTT. However, it is possible to successfully appeal a factual finding if it can be established that the finding is one that no reasonable FTT could have made. This is clearly a very high bar, so careful consideration should be given as to whether it can be met in any particular case. 

That said, if you do decide to appeal, it is not generally advisable to rule out potential grounds of appeal at this early stage. Instead, permission to appeal (PTA) should be sought with respect to any ground that you think you may later want to rely on. It is much easier for taxpayers to strip out grounds of appeal at a later stage than to add additional grounds.

Do your grounds of appeal meet the relevant test to obtain PTA?

To progress beyond the FTT, PTA is required from either the court or tribunal the appeal is from (lower court or tribunal) or the court or tribunal the appeal is to (higher court or tribunal), with the application to the lower court or tribunal coming first. In our experience, the chances of getting PTA from the lower court or tribunal vary depending on which stage the appeal is at. For example, the FTT is likely to grant PTA to the Upper Tribunal, whereas the Court of Appeal is very unlikely to grant PTA to the Supreme Court in tax cases. If the lower court or tribunal refuses PTA, the taxpayer can try again with the higher court or tribunal.

The test that the relevant court or tribunal will apply when deciding whether to grant PTA varies depending on the stage of the appeal. For appeals to the Upper Tribunal, you need only satisfy the relevant tribunal that there is a real (rather than fanciful) prospect of the appeal being successful. However, the test for PTA gets harder the further up the court structure the appeal goes, with an appeal to the Court of Appeal requiring an important point of principle or practice or there to be some other compelling reason for the Court of Appeal to hear the appeal, and an appeal to the Supreme Court requiring a point of general public importance. 

What can help demonstrate that there is a point of general public importance?

When seeking PTA to the Supreme Court, having one or more third-party interveners (such as trade bodies) support the application can be a useful way of demonstrating that the appeal raises a point of general public importance. Where this is relevant, we would suggest making contact with potential interveners as early as possible to give them time to consider intervening and, if they do intervene, so that their submissions reach the Supreme Court in good time to be considered alongside the application for PTA. If a potential intervener is unfamiliar with this process, it can be helpful to talk them through what it involves – noting that it can be as little as one written submission to the Supreme Court if that’s the intervener’s preference (and does not mean that the intervener would be named as a party to the case). 

When does the bulk of the work with respect to the appeal need to be done? 

The preparation of skeleton arguments and bundles of documents are time consuming tasks. So, we would suggest thinking ahead to when they will need to be prepared, particularly as this is yet another area where the process differs depending on the relevant court or tribunal. It would be unfortunate to be caught out by an unexpected deadline. 

For instance, it is for the Upper Tribunal to direct when skeleton arguments and bundles need to be provided. But the deadlines are likely to be close to the hearing and would generally be expressed as “[x] days before the hearing”. In contrast, before the Court of Appeal, deadlines are standardised and come earlier in the process, with the deadlines generally being counted forward from the date when the hearing window is confirmed (i.e., being “[x] days after date of listing window notification”). By the time a case gets to the Supreme Court, the deadlines are again closer to the hearing. 

Do you need to appeal at all?

Although it sounds obvious, you do not need to appeal, if you are happy for the decision to stand. This continues to be the case even if HMRC appeal, provided that, through your participation in HMRC’s appeal, you would not be seeking a different outcome. 

In that case, you can use a respondent’s notice to set out the reasons why you consider the decision should be upheld which can include different or additional reasons in support of the decision being upheld than those set out in the decision itself. But care needs to be taken to ensure that the points can properly be included in a respondent’s notice. If they are, in reality, points for which you should have sought PTA, you may well be prevented from running the arguments unless you obtained such PTA. 

Particular care should be taken where you have previously been successful with respect to one claim but not another – even if the outcome is the same regardless of which claim you succeed on, if you want to continue arguing the unsuccessful claim, you will need PTA. 

How we can help…

Please get in touch with either of us or another member of Slaughter and May’s market-leading tax disputes team if you have any questions on the topics discussed in this blog or another tax disputes query. 

We have extensive experience in advising at every stage of a wide range of from questions of UK corporation tax, partnership taxation and VAT grouping to treaty interpretation and transfer pricing. Whether you are looking for strategic advice in respect of an ongoing issue or proactive risk management through the creation of defence files or an audit of existing processes, we can help.