Case review: Ducas

This case review was first published in Taxation on 24 November 2025 and refers to CRC v Ducas [2025] STC 1843 (Ducas).

Introduction – what is the case about

This is an application by HMRC for permission to appeal against an FTT case management decision regarding disclosure and if successful, the substantive appeal also. Permission had initially been denied by the FTT and then the UT on the papers.

The case management decision under appeal is that the FTT ordered extended disclosure to HMRC – i.e. to provide documents that adversely affected its case and those that supported Ducas’ case – and only required the taxpayer to disclose documents supporting its case.

Background and facts of the case

Workers were paid via Enix Services Ltd, a company associated with Dcuas. HMRC asserts that Ducas knowingly provided false documentation to third party customers (‘Agencies’), relating to “purported deduction” of income tax and NICs (by Enix) from workers that were provided to the Agencies.

HMRC sent Ducas a decision under s8 National Security contributions (Transfer of functions) Act. The decision transferred liability for National Insurance Contributions to Ducas on the basis that HMRC believed the company had knowingly provided its customers with incorrect (fraudulent) documents.

Ducas appealed the s8 Decision on the basis that it had not provided UK Agencies with “fraudulent documents”. As part of case management, the FTT ordered that HMRC should disclose documents to Ducas which both undermined HMRC’s case and which supported Ducas’ case.

Initially for the oral hearing, HMRC appealed this case management decision on the basis that:
“…having decided in Ducas’ favour that it should proceed to make orders for disclosure and evidence, the FTT erred in law as a matter of principle by failing to order the same level of disclosure against both parties in relation to the Fraudulent Documents Issue.[Ground 1]

(4) At the heart of HMRC’s argument is the proposition that, as a matter of general principle, disclosure in the courts in civil litigation, and in the FTT in its full appellate jurisdiction, is or should be regarded as a matter of reciprocal obligation.. [Ground 2]”

At the oral hearing, HMRC submitted that
“…the essential question was why is it in the interests of justice and fair for Ducas not to be required now to disclose adverse documents (either as a result of a search or of documents which it already knows are adverse)”

What did the tribunal decide?

• The UT confirmed that in order for an appeal against an FTT case management decision to be allowed, the following needed to apply:
• the case management decision must have been an error of law. The UT cannot interfere with a case management decision simply because [the UT] might have reached a different conclusion; and
• the decision must have been outside the ‘generous ambit’ of the FTT’s case management decisions or plainly wrong, i.e. the FTT’s decision must be unjustifiable; or
• the FTT had taken into account irrelevant material or ignored relevant material.

The UT discussed the purpose of disclosure and considered the principles relevant to disclosure not only in the FTT but also in civil litigation including references to various civil procedure rules. It confirmed that the basis of the disclosure order must be to ensure that the Tribunal has sufficient documents to be able to make an informed decision on the substantive appeal and to further the overriding objective of dealing with a case fairly and justly.

Further, just because a taxpayer may have been accused of fraud does not entitle them to extended one sided disclosure. A case will still need to be made for this.

The complexity of the case and the charges against the party(ies) are relevant, however, the fact that Ducas was subject to an “allegation of fraud” did not automatically require extended disclosure from HMRC. It was noted however that in its investigations, HMRC may hold significant documentation from other parties that Ducas was unaware of.

HMRC had asserted that there was a principal of reciprocity in disclosure and that if one side were directed to be subject to heightened disclosure, so should the other. The UT highlighted that an order for disclosure is subject to the facts of each case in respect of the issues in the case and not in comparison to any disclosure order made against the other party.

The UT also noted that HMRC had never made a written application to the FTT for extended disclosure from Ducas, whilst the FTT had considered that should HMRC wish for disclosure of a particular document at a later stage, it would be able to make the request. Thus it considered that the case was dealt with proportionately.

What are the key takeaways for tax advisers and their clients?

The FTT has far ranging powers in terms of case management directions, that the UT is unwilling to challenge. The bar for the UT to overturn a CM direction is very high and the FTT decision must be shown to be “plain wrong”.

Finally, do not assume that a normal ‘approach’ is necessarily a given. Just because most cases require both parties to provide the same level of disclosure does not make this a rule. Therefore, always apply for a particular CM decision and do not assume it is a given.

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