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Alcohol Wholesaler Succeeds in 'Fit and Proper Person' Appeal

Businesses that operate in highly regulated fields can be permanently shut down at the stroke of an official pen. However, as a case concerning the wholesale liquor trade made plain, the law requires that such decisions are reasonable.

The case involved a company that was found by HM Revenue and Customs (HMRC) not to be a fit and proper person to trade as an alcohol wholesaler. Approval to carry on that regulated activity under the Alcohol Wholesaler Registration Scheme was therefore refused.

In upholding the company's appeal against that outcome, the First-tier Tribunal (FTT) found that the decision-maker made an erroneous finding of fact that a key person involved in the company's business had sought to deceive HMRC. On the evidence, it concluded that there was no such intention to deceive.

When considering whether the company was a fit and proper person, the decision-maker wrongly approached the matter on the basis that all of the nine criteria set out in HMRC guidance had to be met. The criteria were not exhaustive and he should rather have considered all relevant facts and circumstances in the round.

Given those errors, the FTT found that the decision could not reasonably have been arrived at. It was not satisfied that, had the decision-maker taken the right approach, approval would in any event have been refused. The decision was quashed and HMRC was directed to review the company's application for approval in the light of the FTT's ruling.