Alesen Direct Solutions Limited v The Commissioners for HMRC

Facts

Alesen Direct Solutions Limited, a company whose director was Mr Alex Senechko, appealed to the First-tier Tribunal (Tax Chamber) against VAT in dispute with HMRC. Under section 84(3) of the Value Added Tax Act 1994, a VAT appeal may not proceed unless the disputed tax is paid or deposited. Under section 84(3B) of the VAT Act 1994, that requirement can be lifted if HMRC or the Tribunal accept that paying would cause the appellant hardship. The company applied to HMRC on hardship grounds and HMRC were not satisfied. It then applied to the FTT. Before the FTT, the Senechkos said that about £40,000 had been returned to MS, the customer on a building project that had stalled, and that part of it had been redirected to PPBeer. PPBeer turned out to be a company controlled by Mr Oleg Senechko, the director's father. After a hearing on 18 February 2026, the FTT refused the hardship application in a decision released on 13 March 2026. It accepted that the company currently had insufficient funds, but found that the payments to MS and PPBeer had been decided on after the company realised the VAT was payable. It also found that their principal purpose was to create an impression of impecuniosity so as to avoid paying the tax upfront. The FTT refused permission to appeal on 28 May 2026. Judge Rupert Jones then refused permission on the papers on all four grounds on 18 August 2026. The company renewed its application to an oral hearing, held by video on 28 September 2026, and at that hearing relied on only one ground.