VAT & Expert Evidence

The Upper Tribunal's decision in HMRC v Healthspan Ltd, handed down in May 2026, addresses a procedural question that has practical consequences for anyone involved in contested tax litigation: when can a party rely on expert evidence before the First-tier Tribunal?

The underlying dispute involves a claim by Healthspan for repayment of output VAT in excess of £56 million. In the course of those proceedings, Healthspan applied for permission to adduce expert evidence in support of its case. The FTT granted that permission. HMRC appealed, arguing that the wrong test had been applied.

The UT agreed. It held that the correct starting point when considering whether to admit expert evidence is whether that evidence is "reasonably required to resolve the proceedings" - a test drawn by analogy from the rules governing expert evidence in civil courts. The FTT's original decision was set aside, and the UT remade it, confining the scope of the expert evidence to what that standard permits.

The practical effect is a meaningfully higher threshold. It is no longer sufficient to show that expert evidence would be helpful or relevant. The question is whether it is genuinely necessary to resolve a specific issue in the case. Experts will not be permitted to comment on matters of law, on facts that can be established by other means, or on questions that are ultimately for the tribunal itself to determine.

For parties preparing tax appeals, this has direct consequences. Applications for expert evidence need to be targeted and clearly justified from the outset. A broadly framed application is now more vulnerable to challenge, and the costs of instructing an expert whose evidence is subsequently confined or excluded can be substantial.

The decision also reinforces the tribunal's case management function. The FTT has always had discretion in this area, but Healthspan makes clear that discretion must be exercised against a defined standard - one that keeps expert evidence proportionate and focused.