In BPP Holdings & Ors v HMRC [2017] UKSC 55, the Supreme Court (SC) dismissed HMRC’s appeal and agreed that they were not entitled to take part in the case proceedings due to a failure to provide information by the agreed due date.

It is not uncommon for HMRC to issue its statement of case late, or to be slow in providing other information for upcoming hearings: in this case, the tactic backfired.

  • BPP Learning Media Ltd supplied zero rated books.
  • BPP University College of Professional Studies Ltd supplied standard rated education.
  • BPP treated these as two separate supplies.
  • HMRC considered it to be a single supply of standard rated education.
  • HMRC issued VAT assessments and penalties.

BPP appealed to the First-Tier Tribunal (FTT):

  • HMRC served its statement of case 14 days late.
  • BPP did not oppose HMRC’s application for an extension of time for disclosure.
  • HMRC were also a few days late with its disclosure.
  • Before receiving HMRC’s disclosure, BPP requested further information of HMRC’s case:
    • After failing to gather the information directly from HMRC, BPP applied to the FTT for an order.
    • An order was issued requiring HMRC to provide the information by an agreed date or they would be barred from taking further part in the proceedings.
  • HMRC provided incomplete information on the due date.

BPP applied for the debarring order to be enforced:

  • The FTT allowed BPP’s application and barred HMRC
  • The Upper Tribunal (UT) overturned this decision, lifting the debarring order
  • BPP’s appeal was allowed by the Court of Appeal, overturning the UT decision.

The SC had to decide whether the Court of Appeal decision should be upheld, and the debarring order remain, or to allow HMRCs appeal. The SC found:

  • That the FTT judge had clearly carefully considered both the prejudice caused to BPP by HMRC’s delay and the disadvantage the debarring order has on HMRC.
  • Allowing HMRC to rely on its public duty to protect the public interest, to avoid the debarring order, would set a dangerous precedent and discourage public bodies from living up to the standards expected in the conduct of litigation.
  • Although the debarring order would improve BPP’s change of success, that could always be said about any debarring order and it should only be considered a reason to overturn the order in exceptional circumstances.
  • There were no exceptional circumstances here.

The SC dismissed HMRCs appeal and upheld the decision to issue a debarring order.


E-books to become zero rated?

Colouring books: zero-rated for children not for adults

Single or multiple supply?

Appeal: grounds for appeal

Appeals: Late

How to appeal a tax penalty (subscriber version)

Penalties (VAT)


External link to case: BPP Holdings & Ors v HMRC [2017] UKSC 55 


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