UK tax tribunal confirms limits of third-party access to documents in appeals

The First-tier Tax Tribunal (FTT) decided to partially grant an application for disclosure of documents in an appeal to a third party, only allowing the non-party access to some of the documents it sought to see. The recent ruling provides important clarification on the tribunal’s approach towards allowing disclosure of documents from tax appeals to non-parties, which acknowledges third parties’ rights to access certain documents while setting out the limits of these rights.

Tax expert Steven Porter of Pinsent Masons said: “Taxpayers have to accept, in most cases, an element of public disclosure when bringing a tax appeal, but most would prefer that this is as limited as is necessary in order to bring their appeal. Taxpayers will be pleased that it has now been clarified that there is no default position that disclosure will be granted in tax appeals and that third parties do have to justify their need to see a document.”

The disclosure application was brought by Transopco, which provides mobile ride hailing services under the brand Freenow. It applied to the FTT for access to a range of documents from a tax appeal involving rival mobile ride hailing provider Bolt.

In the underlying case, Bolt has been in dispute with HMRC about the VAT treatment of its ride hailing services, specifically whether they fall within the Tour Operator’s Margin Scheme (TOMS). The FTT decided Bolt’s case in December 2023, allowing Bolt’s appeal. HMRC then appealed to the Upper Tribunal, which was heard in November 2024, but the decision has not been released. It is understood that Transopco has a similar dispute with HMRC.

Responding to Transopco’s disclosure application, HMRC took a neutral position, but Bolt objected. The FTT’s ruling delved into the case law concerning applications by non-parties for access to documents in an appeal, and adopted the principles laid out by the Court of Appeal in the 2024 case known as Moss. This approach requires the tribunal to consider these applications through a two-step test.

The first step is for Transopco to justify why it wants to access the documents and how accessing them will allow it to follow the case and understand the reasons why the judge decided the case in a particular way. The tribunal made it clear that there is no presumption or default position of releasing documents to non-parties who have applied to see them, and the access needs must be justified in every case.

Only if the third party’s ‘good reason’ for disclosure is proven in the first step does the FTT need to consider if any other factors should be taken into account to weigh against the disclosure, such as the risk of any harm or prejudice that may be caused by it.

Having applied these principles, the FTT allowed Transopco’s application in part. It ordered Bolt to provide Transopco with several documents, on the basis that these will assist Transopco in understanding the way the case was put more fully and why the tribunal decided the case as it did. These documents include transcripts of the hearing; pleadings, such as grounds of appeal, statement of case and reply, and statements of agreed facts and skeleton arguments; and the witness statement of Bolt’s UK and Ireland country manager.

Transopco was ordered to reimburse Bolt for 20% of the costs of obtaining the transcript, and Bolt was given a short time to apply to be able to redact confidential and commercially sensitive information from them.

However, the FTT refused permission for disclosing certain types of documents, including any documents in connection with Bolt’s application for its hearing to be expedited, the exhibits to the witness statement, and documents related to the application for permission to appeal to the Upper Tribunal.

On refusing access to Bolt’s expedition applications and related documents, the tribunal said that this was because Transopco had failed to show any good reason for needing access. It accepted Bolt’s argument that Transopco’s application for expedition will be decided on its own facts and circumstances and therefore seeing Bolt’s application will not further its position. In addition, the tribunal recognised that these documents also contained commercially sensitive information.

The FTT denied access to the exhibits to the witness statement on the basis that they contain a lot of confidential information and it would be too onerous for Bolt to redact all of them, while it concluded that the content of Bolt’s application for appeal to the Upper Tribunal would not advance Transopco’s understanding of the FTT’s decision.

The FTT also refused the disclosure of the full hearing bundle for three reasons.  According to the tribunal, this is voluminous with over 3,000 pages and would require significant work to redact the commercially sensitive information. In addition, it noted that the access to the bundle is not necessary for Transopco to understand proceedings or the reasons why the tribunal decided the case as it did. However, the decision suggested that disclosure of specific items in the hearing bundle and of particular exhibits the witness statement might be sought at a future date.

“Taxpayers will also be relieved that a line has been drawn such that disclosure of whole bundles and large volumes of evidence exhibited to witness statements is unlikely. Third parties will need to justify why they would need to see a specific document,” said Porter.