There is a principle that sits at the heart of the British legal system: when a court or tribunal issues directions, everyone must follow them. Not just individuals. Not just businesses. Government departments too, including HMRC.
A tax case decided heard on 15 May 2026 has put that principle firmly back in the spotlight, and every tax adviser, accountant, and tax lawyer in practice should take note.
What Happened
In Coates & Anor (t/a Ross Coates Solicitors) v Revenue and Customs UKFTT 723 (TC), the First-Tier Tribunal (Tax Chamber) was managing a long-running appeal. On 2 November 2025, Tribunal Judge Nicholas Aleksander issued formal directions. One of them, Direction no.5, required both parties to send listing information to the Tribunal and to each other by 30 January 2026.
Direction listing information is routine administrative detail: covering subjects like who will attend, how long the hearing will take, available dates. Unremarkable in itself. But HMRC sent the information to the Tribunal on 26 January 2026 and deliberately did not send it to the other party.
When the appellants, Ross Coates Solicitors (“RCS”), discovered this, they applied to have HMRC barred from the proceedings entirely.
HMRC’s Response: “A Deliberate and Proportionate Case Management Decision”
Rather than apologising, HMRC’s legal team described the non-compliance as “a deliberate and proportionate case management decision, taken in light of the procedural history of this appeal.”
Their reasoning was that the appeal had suffered repeated delays caused by RCS over several years, and HMRC feared that sharing the listing dates might allow RCS to avoid being listed for a hearing. So HMRC simply decided, unilaterally, without asking the Tribunal, not to comply with the direction.
In short: HMRC decided it knew better than the court.
What the Judge Said:
Tribunal Judge Blackwell was unsparing. The judgment describes HMRC’s conduct as “contumelious” (Ouch!), a legal term denoting wilful, deliberate, and contemptuous disregard of the court’s authority. It is not a word judges reach for lightly.
The judge was direct on the question of justification:
“If they considered the direction open to abuse, by ‘enabling [RCS] to avoid listing’, they should have applied to vary the directions so that the listing information was provided directly to the Tribunal only.”
The message could not be clearer. If HMRC had a genuine concern, the correct, and only course was to apply to the Tribunal for a variation. What it could not do was simply choose not to comply.
The judge further noted that HMRC’s suggestion that RCS; a firm of solicitors and therefore officers of the court, would deliberately abuse the process was an “extraordinary allegation” unsupported by any particularised evidence.
HMRC had also, in the judge’s words, “brought about (at least in a but for sense) the circumstances giving rise to this hearing — incurring unnecessary expense and diverting the resources of the Tribunal.”
At the hearing itself, HMRC apologised and conceded that the conduct of its previous litigator “could lead to disciplinary sanctions” if engaged in by a regulated individual. The judge acknowledged the apology, but gave it little weight, because it came only at the hearing after HMRC had maintained its position as justified right up until that point.
The Outcome: HMRC Escaped — But Only Just
Applying the Denton test — the three-stage framework governing relief from sanctions, confirmed as applicable in tax tribunal proceedings by BPP Holdings v HMRC EWCA Civ 121 — the judge assessed the breach as follows
Stage 1 (Seriousness): The breach was serious — deliberate and contumelious. However, it was not significant to the overall proceedings because the hearing had been listed in the same way it would have been had HMRC complied.
- Stage 2 (Reason for default): HMRC deliberately chose to disregard the direction. There was no good reason.
- Stage 3 (All the circumstances): RCS had suffered no real prejudice to its ability to present its case. Barring HMRC entirely would have been disproportionate.
The application to bar HMRC was dismissed. HMRC escaped the most severe sanction — but the judgment is an unambiguous public rebuke.
Why This Case Matters — and What Advisers Must Keep in Mind
1. HMRC Is Not Above the Rules of the Tribunal
The most striking feature of this case is who broke the rules: HMRC itself. The authority that rigorously pursues taxpayers and advisers for missed deadlines and procedural failures was found to have deliberately flouted a court direction.
For advisers representing clients in HMRC disputes, this case is a practical tool. It confirms that the Tribunal will scrutinise HMRC’s conduct just as it scrutinises everyone else’s, and will not defer to HMRC simply because of who it is. Do not be intimidated. Hold HMRC to the same standards it holds your clients.
2. You Cannot Unilaterally Ignore Directions — Ever
This is the golden rule for every adviser: if a direction is problematic, apply to vary it. Do not ignore it. However rational the reasoning, however frustrating the procedural history, a unilateral decision to depart from a tribunal direction is indefensible. Advise your clients accordingly — and hold yourself to the same standard.
3. Understand the Denton Framework
The Denton test governs how any breach of directions will be assessed in tribunal proceedings irrespective of whether the defaulting party is your client, the other side, or HMRC.
The key points to carry into practice are:
- A deliberate breach will always be characterised as serious.
- Seriousness alone does not automatically produce the most severe sanction.
- Prejudice to the other party and proportionality remain decisive at Stage 3.
- The framework applies equally to all parties. There is no special treatment for government departments.
4. Procedural Compliance Is a Professional Conduct Issue
HMRC’s own concession that its litigator’s conduct “could lead to disciplinary sanctions” if engaged in by a regulated individual is a pointed reminder that procedural compliance in tribunal proceedings is not merely a technical matter — it is a professional conduct obligation.
Solicitors and barristers advising on tax disputes are officers of the court. Deliberately ignoring directions, even with a seemingly rational justification, can attract regulatory scrutiny. For accountants and unregulated tax advisers assisting clients in tribunal proceedings, the lesson is the same: shortcuts in litigation carry real risk, both to the client’s case and to your professional reputation.
5. Apologise Early or Not at All
The judge’s finding that HMRC’s apology was given “little weight” because it came so late carries a clear practical lesson.
If a breach of directions occurs either by your client or by the other side, early acknowledgement matters. Maintaining an untenable position until the day of the hearing and then apologising is unlikely to move a tribunal. If you or your client have made a mistake, address it promptly and transparently.
The Broader Message for Tax Practice
This case is a reminder that the First-Tier Tribunal is a genuinely independent forum where the rules apply equally to all parties.
Taxpayers and their advisers should approach HMRC disputes with confidence, not deference. The Tribunal will call out misconduct — whoever is responsible.
For those advising clients on tax affairs and disputes, the practical checklist is straightforward:
- ✅ Always comply with tribunal directions — and ensure your clients do too.
- ✅ If a direction causes concern, apply to vary it — never ignore it.
- ✅ Know the Denton framework — it applies to everyone, including HMRC.
- ✅ Act promptly if a breach occurs — a late apology carries little weight.
- ✅ Hold HMRC to the same procedural standards — the Tribunal will.
Coates v Revenue and Customs UKFTT 723 (TC) is a small case with a large message. The rule of law is not a slogan. It applies to everyone — and this judgment proves it.
This article is written for general information purposes and does not constitute legal advice. If you are involved in a tax dispute or tribunal proceedings and require specialist advice, please get in touch.
Photo by Nick Fewings on Unsplash
