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Procedure.Tax
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M32a. Late appeals
No special treatment for liquidators taking over company's affairs
"[51] We accordingly reject the proposition advanced by this ground of appeal. That there is, in our judgment, no specific obligation on the tribunal to take into account the fact of the Company being in liquidation together with the general issues around insolvency processes which [the taxpayer] highlights, should not result in injustice. There is nothing to preclude the tribunal taking account, as part of its analysis when exercising its discretion, any particular issues that arise in a given case from a company having been put into liquidation and anything that flows from that. That will however require the appellant to advance evidence regarding the particular facts and circumstances relied on to justify the delay and in support of the appellant’s application, so that the tribunal hearing the application can evaluate those in the light of the parties’ submissions in the normal way. [The taxpayer's] submissions referred in general terms to FTT decisions which had recognised the particular “sensitivity” around appellants who were liquidators. Given a company’s status will be part of the background factual matrix, it would not be surprising if facts concerning the liquidation process, so far as it was relevant to the issue before the tribunal, were mentioned. If the appellant was seeking to extract a general principle from such decisions, we would need to have been taken to them." (Uddin v. HMRC [2023] UKUT 99 (TCC), Judge Raghavan and Judge Baldwin)
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Whether appeal late depends on whether decisions properly served
"[128] However, we did not accept that the notices were necessarily served on the dates alleged by Mr Bracegirdle. We were referred to the decision of the Upper Tribunal in Barry Edwards that addressed the question of whether HMRC had demonstrated that notices had been properly addressed and sent to the taxpayer. HMRC accepted that if we found that the notices had not been properly notified, they are invalid and the question of an appeal or the lateness of an appeal falls away.
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[130]...However, we also consider that Mr Dougan would be significantly prejudiced if HMRC are not required to prove that the penalties are valid. We also accept that there would be no grounds of appeal against the penalties if and to the extent that we find that the notices were properly served.
[131] Weighing the relevant factors in the balancing exercise as set out in Martland, we considered that it would be in the interests of justice to give permission for the appeal against the penalties and surcharges to be admitted out of time, and in particular for the Tribunal to consider the issue of whether the penalties had been properly served." (Dougan v. HMRC [2022] UKFTT 140 (TC), Judge Nicholl)
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- Challenge to letter notifying intention to charge penalty treated as appeal
"[17] Whilst we accept that the letter of 17 January 2020 does inform the appellant that he will be receiving a formal penalty determination against which he will have a right of appeal, we have not been provided with that penalty determination, and the letter does not state the time within which the appellant had such a right.
[18] Furthermore, we are dealing here with an unrepresented litigant in person who having been sent a letter telling him that he was going to be liable to penalties, responds that "I do however contest the penalty explanation.......". It seems to us that this is a clear statement that he does not accept the penalty, and that had that wording being used in response to the more formal penalty determination, it would have been treated by HMRC as an appeal against the penalty. The objectively reasonable person would have construed those words as non-acceptance that he was liable to the penalty.
[19] All that has happened here is that the appeal has been made early. It was made against the contents of a letter dated 6 November 2019 which had been construed by the appellant as an allegation by HMRC that he was liable to a penalty. And he appealed against it within 30 days.
[20] We are somewhat surprised, therefore, that HMRC have not accepted this as an appeal not just against the contents of the letter of 6 November 2019 but also against the more formal penalty determination which HMRC claim to have sent the appellant on 17 January 2020. But they have chosen not to do so." (Thompson v. HMRC [2024] UKFTT 138 (TC), Judge Popplewell)
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HMRC not under duty to tell taxpayer they need to file Notice of Appeal
"[25] I agree with [HMRC] that HMRC are under no duty to tell a taxpayer - especially one that is professionally represented - that they need to file a Notice of Appeal with the Tribunal within 30 days of the date of the review conclusion letter, and that notifying HMRC of their intention to appeal to this Tribunal does not excuse a subsequent failure to file the Notice of Appeal.
[26] But, even if HMRC were not under a duty to notify MPTL of the appeal process, in fact they had notified MPTL and the accountants of the procedure for appealing in the final paragraphs of the review conclusion letter." (MPTL Limited v. HMRC [2022] UKFTT 472 (TC), Judge Aleksander)
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VAT appeal not late if it does not include hardship application
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"[32] From the cases referred to above, it seems to me to be clear that the under both FA72 and VATA94 the fact that an appeal cannot be entertained does not mean that it has not been validly made. It does not seem to have been argued in the cases that a tribunal entertained an appeal when it received and acknowledged a notice of appeal. The cases, in particular Hubbard, suggest that the tribunal only begins to entertain an appeal when it lists it for hearing...
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[36]...It seems to me that section 84(3) VATA and rule 22(1) are entirely consistent with the authorities which I discuss above in making a distinction between making an appeal and entertaining or proceeding with an appeal. For reasons set out above, I consider that starting proceedings is not the same thing as entertaining or proceeding with an appeal.
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[39] In summary, I have decided that SNMP’s appeal in 2017 was made in time and, notwithstanding the fact that the disputed tax was not paid and no application for hardship was made at that time, it was a valid notification of the appeal..." (SNM Pipelines Limited v. HMRC [2022] UKFTT 231 (TC), Judge Sinfield)
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Reliance on an adviser​
- Failure of adviser usually attributed to taxpayer
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"[36] Standing back, I note that there has been a delay of 59 days for reasons which are described by Ms Fichardt as being a “mistake”. I have found that there was no good reason for the delay. I have also found that MPTL cannot distance itself from the failure by its then accountants to file the Notice of Appeal on time.
[37] As regards all the other circumstances, I find that they are not such as to persuade me to grant permission particularly once I take into account the particular importance of the need for statutory time limits to be respected, given the absence of any good reason for the delay." (MPTL Limited v. HMRC [2022] UKFTT 472 (TC), Judge Aleksander)
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"[79]...However, as the Upper Tribunal said in and Katib v HMRC [2019] UKUT 189 (TCC) (‘Katib’) at [49] (their emphasis):
“We accept HMRC’s general point that, in most cases, when the FTT is considering an application for permission to make a late appeal, failings by a litigant’s advisers should be regarded as failings of the litigant.”
[80] The UT returned to this issue at [54], saying:
“It is precisely because of the importance of complying with statutory time limits that, when considering applications for permission to make a late appeal, failures by a litigant’s adviser should generally be treated as failures by the litigant.”
[81] The UT then cited the Court of Appeal’s judgment in Hytec Information Systems v Coventry City Council [1997] 1 WLR 666 (“Hytec”). Ward LJ, giving the leading judgment, said at p 1675:
“Ordinarily this court should not distinguish between the litigant himself and his advisers. There are good reasons why the court should not: firstly, if anyone is to suffer for the failure of the solicitor it is better that it be the client than another party to the litigation; secondly, the disgruntled client may in appropriate cases have his remedies in damages or in respect of the wasted costs; thirdly, it seems to me that it would become a charter for the incompetent...”
[82] We do not consider that there is anything in the procedural background to this case that takes it out of the ordinary or provides a satisfactory reason for the delay." (Gill v. HMRC [2022] UKFTT 368 (TC), Judge Sinfield)
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"[86] For her part, Ms Davies relied on Katib, where the UT said at [49] (their emphasis):
“We accept HMRC’s general point that, in most cases, when the FTT is considering an application for permission to make a late appeal, failings by a litigant’s advisers should be regarded as failings of the litigant.”
[87] The UT returned to this issue at [54], saying:
“It is precisely because of the importance of complying with statutory time limits that, when considering applications for permission to make a late appeal, failures by a litigant’s adviser should generally be treated as failures by the litigant.”
[88] The UT then cited the Court of Appeal’s judgment in Hytec Information Systems v Coventry City Council [1997] 1 WLR 666 (“Hytec”). Ward LJ, giving the leading judgment, said at p 1675:
“Ordinarily this court should not distinguish between the litigant himself and his advisers. There are good reasons why the court should not: firstly, if anyone is to suffer for the failure of the solicitor it is better that it be the client than another party to the litigation; secondly, the disgruntled client may in appropriate cases have his remedies in damages or in respect of the wasted costs; thirdly, it seems to me that it would become a charter for the incompetent...”
[89] I agree with Ms Davies that in accordance with Katib and Hytec the Tribunal should not normally find that a person’s reliance on his adviser provides a good reason for delay. I considered whether the facts of Mr Miah’s case took him outside that normal range, and decided that they did not. That is because:
(1) Mr Miah was sent Ms Smith’s statutory review decision. This set out the amounts due for the years 2012-13 through to 2016-17 and included his right to notify the appeal to the Tribunal within 30 days. Mr Miah would thus have been aware of that deadline.
(2) There was no evidence of any communications between Mr Miah and Ms Rahman at any point, for instance, asking what had happened and whether she had notified the appeal.
(3) There was no evidence before the Tribunal as to Mr Miah’s position during the nine month period after the statutory review decision.
[90] I therefore find that Mr Miah’s reliance on Ms Rahman and/or Tax Resolute does not provide him with a good reason for the delay." (Miah v. HMRC [2022] UKFTT 228 (TC), Judge Redston)
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- Failure by adviser to check whether written appeal submitted not attributed to taxpayer
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"[64] As to whether Mr Huntly’s error could have been uncovered earlier by Independent Tax, I accept that the covid working restrictions from mid-March to July 2020 impeded the work of Independent Tax. The employee engaged to look after Mr Huntly and the nine other off-shore workers had treated Mr Huntly as if he had made a written appeal. There is in my opinion nothing Mr Huntly could have done to prevent this error by the employee of Independent Tax. The failure ought not to be attributed to Mr Huntly, he did all he could to comply with his obligations by appointing a legitimate and reputable firm of tax accounting advisers. Mr Huntly only became aware of the need to file a written appeal in July 2020 at the same time as Mr Rippon. I consider that Mr Huntly acted as quickly as he was able having regard to his capabilities." (Huntly v. HMRC [2022] UKFTT 135 (TC), Judge Gething)
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Late appeal permitted
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- HMRC fail to set out appeal rights/time limits adequately
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"[65] The Tribunal is influenced by the final sentence of paragraph 37 of the Upper Tribunal’s decision in NT ADA already quoted at paragraph 27 above:
“As already indicated, a failure by HMRC to provide adequate notification of appeal or review rights in the decision letter could also influence the exercise of the FTT’s discretion to admit a late appeal.”
[66] We consider the advice given by HMRC in their decision letters was confusing. The encouragement to lodge appeals given by HMRC officers during the meetings and telephone calls led the Company to believe that its agents had lodged appeals. This is supported by the fact that HMRC’s Debt Department did not write to the Company until 13 September 2019. HMRC had advised the Company that it would not take any action to collect the disputed tax while the reviews of the decisions were being carried out. In the absence of any demands from HMRC the Company was entitled to believe the decisions were under appeal.
[67] The amount of VAT at stake is considerable (£631,548.43). We consider the prejudice to the Company if the appeals are not allowed to proceed outweighs any prejudice to HMRC.
[68] The application to allow the two appeals dated 24 September 2019 is successful." (Transwaste Recycling and Aggregates Limited v. HMRC [2022] UKFTT 4 (TC), Judge Rankin)
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“I do not think this vitiates the assessment, but had HMRC not accepted (whether by mistake or not) that the appeals were not late, despite saying originally that they were, I would have granted permission for late appeals to be made to HMRC on the sole basis that the assessment was in error in not indicating the time for appeal. A reference to the appeals part of HMRC’s website is not good enough.” (Bhatti v. HMRC [2018] UKFTT 67 (TC), §53, Judge Richard Thomas).
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“Mr Haley conceded that if we were to find that the letter dated 18 September 2006 was a claim and it had been rejected by the letter dated 18 December 2006 then HMRC would not object to an application for permission to appeal out of time. The basis for that concession was that the letter dated 18 December 2006 did not set out the appellant’s rights of appeal, and in the letter dated 21 January 2011 the appellant had been given 30 days in which to appeal.” (Websons (8) Ltd v. HMRC [2013] UKFTT 229 (TC), §23).
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- Erroneous belief that appeal could be pursued in existing proceedings
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“However, in deciding whether to grant permission to bring a late appeal, the Tribunal can take into account, in determining the reasons why the appeal has been brought late, that the Appellant quite reasonably thought that it was open to it to challenge the new decision of HMRC in the earlier appeal proceedings, without having to commence a new Tribunal appeal. This belief of the Appellant, whether right or wrong as a matter of law, was understandable in the particular circumstances of this case for a number of reasons.” (Newcastle Under Lyme College v. HMRC [2018] UKFTT 98 (TC), §75, Judge Staker).
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- Mistaken belief that appeal made
[62] Following the guidance in the UT in Perrin, in considering whether the excuse for the delay is reasonable the Tribunal must take into account the attributes of the taxpayer. I accept Mr Huntly was inexperienced and unfamiliar with tax appeals. He was understandably panicked by the assessments and failed to read properly the letters of 27 November 2018 which set out his rights of appeal but after the call with Officer Bromley in which he advised her there must have been a mistake he believed he had made an appeal. He was unemployed and desperately seeking new employment. He had a wife and sone to provide for, I consider that Mr Huntly had a reasonable excuse for failing to file a written notice of appeal within 30 days of the assessments." (Huntly v. HMRC [2022] UKFTT 135 (TC), Judge Gething)
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- Mistaken belief that decision covered by existing appeal
"[40] We must next establish the reasons for the delay and evaluate all the circumstances of the case, assessing the merits of the reasons and the prejudice caused to the parties by granting or refusing permission. The reason for the delay was that, as described above, Mr Baskararajulu was waiting for HMRC to respond to his appeal of the £100 penalty, and thought that his appeals of the £300 and £900 penalties would be included as a continuation of the same appeal process. For a taxpayer with Mr Baskararajulu’s experience and attributes, we consider that this was a reasonable conclusion for him to have reached." (Baskararajulu v. HMRC [2023] UKFTT 430 (TC), Judge Gauke)
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- Mistaken belief that assessments in abeyance pending criminal investigation
"[50] Applying the Martland criteria described above, we first consider that the delay of approximately four years was significant and serious. Secondly, as we have already found, we consider that there was a good reason for the delay because Octagon reasonably formed the impression that the Landfill Tax assessments were being held in abeyance until the conclusion of the criminal proceedings and, specifically, that that impression held true in respect of the need to request a review or file an appeal.
[51] Thirdly, considering all the circumstances of the case, we accept the finding of the FTT that Octagon’s case was neither very strong nor very weak. We also accept that Octagon would suffer considerable prejudice if it were not able to contest the Landfill Tax assessment of some £57m. On the other hand, we accept that HMRC does suffer some prejudice by having to contest an appeal which it thought had been concluded, albeit that that prejudice is somewhat self-inflicted: HMRC should have realised that its statements to Octagon in September, October and November 2016 were, at the very least, ambiguous. Moreover, the extent of the prejudice suffered by HMRC in having to contest what is probably a fact-intensive appeal in respect of the Landfill Tax assessments is reduced by the knowledge that essentially the same factual matrix is already under appeal in relation to the VAT assessments. Therefore, considering all the circumstances and bearing in mind the need to observe time limits, we consider that the balance lies in favour of Octagon." (Octagon Green Solutions Limited v. HMRC [2023] UKUT 268 (TCC), Judges Rupert Jones and Brannan)
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- Repeated unsuccessful attempts to notify appeal
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"[18] In relation to the daily penalties and the late tax penalties the appeal is 137 days late. Such delay is serious and significant. However, Mrs Gatward made ongoing efforts to appeal from the moment she received her penalty notice in March 2019. She was prohibited from doing so by the refusal to accept the appeal. Once the review was concluded in December 2019, she then made repeated efforts to appeal to the Tribunal from January 2020 onwards. Her appeal was not in the proper form or addressed properly to the Tribunal, despite clear information on how to do so in letters received from HMRC, but I accept that she made comprehensive and reasonable efforts to bring the appeal." (Gatward v. HMRC [2020] UKFTT 363 (TC), Judge Hudson)
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- Poor health and continuing efforts to communicate justify long delay
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“So, applying Data Select, and taking into account BPP, I have duly considered the various factors and all the relevant circumstances. The failure to comply with the statutory time limit, given its clear purpose, and the length of the delay weigh heavily in favour of refusing to extend time. However, the reasons for the delay, particularly the ongoing effect of the various health-related issues, do in my judgment amount to a “good explanation”, taking into account the continuing efforts of Ms Rowledge to communicate with HMRC and object to the Assessment. In terms of the consequences for the parties, while an extension of time would prejudice HMRC in having to re-open a closed file, a refusal to extend time would cause very serious consequences indeed for Ms Rowledge.” (Rowledge v. HMRC [2016] UKFTT 556 (TC), §37).
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- Misunderstanding appeal requirements combined with short delay
“We found that the reason for the delay was that Mr Thoene did not carefully read the appeal requirements, despite these being explained to him by HMRC and the Tribunals Service. However, the period of delay was relatively short; HMRC did not object to the late appeal and the prejudice to Mr Thoene in not being able to appeal was significant…Having considered and balanced these factors in the light of the guidance given by Data Select and BPP, we decided it was in the interests of justice to allow Mr Thoene to appeal to the Tribunal.” (Thoene v. HMRC [2016] UKFTT 454 (TC) §§15…16).
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- HMRC’s correspondence induces taxpayer to believe the matter is still open
“The second is the invitation for further evidence for the review officer to consider. It is not an unreasonable assumption, and one which the Appellant apparently made, that if further evidence is provided, the decision remains open and not final.” (Szczepanski v. Home Office [2014] UKFTT 162 (TC), §46, Judge Sadler).
“We see the force of the Appellant's case. The decision letter of 6 December 2010 invites the Appellant to provide any further information relevant to the matter in dispute…Whilst we can see that throughout this period Mr Somal is making every effort to explore fully the Appellant's case, which is to his credit, we can also see that it induces the Appellant (and its professional advisers) to regard matters as still open and evolving. It is fair to conclude that Mr Somal regarded matters in the same way. After the decision letter itself, he did not seek to assert the 30 day limitation period for review request or appeal until his letter of 7 March 2013…We take note that the delay from decision letter to lodging the notice of appeal is unusually long, but it seems to us that in this case the more relevant question is not how long that period is, but what happened during that period, and as we have set out, throughout that period both parties acted as though HMRC had not reached a final decision. We recognise that the Appellant (or its advisers) were at times tardy, perhaps unduly so, but even when there were lengthy periods between correspondence, both parties seemed content to let matters rest, and then recommenced their dialogue…As we have concluded, HMRC are not prejudiced on the grounds that they might fairly have regarded the issue as finally closed.” (Scanwell Freight Services Ltd v. HMRC [2014] UKFTT 106 (TC), §§49…50…52…53, Judge Sadler).
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- One week late, correspondence with HMRC continuing
"[64] For the above reasons, I am firmly of the view that this is a case where the exercise of my discretion in favour of the Appellant is justified. That is not to say that I do not agree with Mr MacDonald that the Appellant made a mistake in not pursuing a twin-track approach of attempting to locate the fraudulent supplier while at the same time making its appeal. The Appellant could, and indeed should, have done that. But I believe that a refusal to allow the Appellant to continue with its appeal for that reason alone would be a draconian punishment for something which was no more than a mistake made in good faith and which did not lead the Respondents to think that the Appellant no longer wished to challenge the conclusions set out in the review letter." (Snapcrest Ltd v. HMRC [2020] UKFTT 320 (TC), Judge Beare)
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“In this case I have considered carefully the Appellant’s explanation for its delay of one week. Mr Dons’s explanation, that he did not realise that the time limit was running while he was still in correspondence with the Respondent, is consistent with his behaviour in emailing the Respondent on 30 May 2016. Although the deadline for appealing was clearly stated by the Respondent’s officer in the letter of 12 May 2016, I accept that the Appellant was confused by the Respondent’s offer to consider fresh evidence. I accept that the Appellant did not appreciate that its proposal to remove the adaption did not constitute fresh evidence, and so the time for appealing had begun to run.” (Bacabo Auto En Truch Verhuur v. Director of Border Revenue [2017] UKFTT 595 (TC), §17, Judge Bailey).
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- HMRC knew their decision was being challenged
[16] The assessment to tax was sent to the correct KPMG office, and was duly appealed on 28th December. The appeal against the assessment raised the question of the availability of the losses for payment arising from commissions paid in the year of account, and in consequence, the Inspector knew within time that his decision about the non-availability of those losses was being put in issue by the taxpayer.
[17] Those losses and whether or not they are allowable would be in issue in exactly the same way in any appeal from the loss determination. The Revenue can point to no relevant prejudice to the public finances if this appeal is allowed to be lodged out of time.
[18] By contrast, the taxpayer's case as to whether or not he has to pay tax for that year of account will be irremediably prejudiced if, simply by having failed for what appears to be explainable reasons to lodge the appeal in time, those losses are disallowed without any enquiry as to whether they were in fact properly allowable.
[19] For these reasons it seems to me that this is the paradigm example of circumstances where the General Commissioners should have used what I have found to be their more extensive discretion than that of the Inspector, conferred by section 49 subsection 1 of the Taxes Management Act, to extend time for the taxpayer to lodge an appeal against the loss determination." (R (oao Browallia Cal Ltd v. General Commissioners of Income Tax [2003] EWHC 2779 (Admin) Evans-Lombe J)
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- Late appeal allowed against assessments that it was common ground were excessive
“While we appreciate the importance of time limits being respected, our decision on the alternative point is that the Appeal should in any event proceed. Our reasons for this decision were that it appeared to be virtually common ground that the assessments in question were not only estimated assessments, but quite naturally ones that were likely to be excessive. There had been various intimations that if the assessments were now simply confirmed, the Appellant might be made bankrupt. There was also evidence on the file that the Appellant had earlier used two different firms of accountants, and without our knowing where the fault lay, the Appellant claimed that he had been let down by those accountants, and certainly one at least had failed to respond to numerous letters from HMRC. Finally we noted that both the Appellant and his current accountant had appeared before us, the latter making it clear that full figures had already been prepared for all the earlier years in question. On the basis therefore that it would be manifestly unfair to render it likely that the Appellant would be made bankrupt by assessments that may well have been excessive, and that the Appellant and his accountant were now ready to provide all requested figures, the Appellant confirming that he would then pay the tax shown to be properly owing, we decided to allow the appeal to proceed out of time, were our earlier decision that there was already an open appeal wrong.” (Elazoua v. HMRC [2014] UKFTT 75 (TC), §7, Judge Nowlan).
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- Late appeal would be bound to succeed
"[77] In our view, although we do not find Ms Marfo’s reasons for delay to be particularly compelling, this must be balanced against the plain injustice that would arise if she were prevented from proceeding with an appeal which (on the basis of the law as it presently stands) would be bound to succeed.
[78] We appreciate that there may be circumstances where the length of the delay and need for finality may outweigh the injustice of preventing an overwhelming case from proceeding. For example, there may be cases where a taxpayer seeks to reopen a long-forgotten matter as a result of a court decision taking place some years after the event. However, that is some distance from the facts in the present case." (Marfo v. HMRC [2022] UKFTT 289 (TC), Judge Frost)
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- VAT security late appeal allowed: prejudice to taxpayer particularly significant due to giving rise to criminal conduct
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“While, on the basis of what is before us at this hearing today, and taking account of the Tribunal’s more limited jurisdiction in VAT security matters, it does not appear to us that the appellant has a high probability of success we take into account the severity of outcome in terms of Ms Mitreska’s exposure to criminal proceedings if the appellant is not allowed the chance to challenge the VAT security decision. The length of delay is not insignificant, but the combination of the fact the appellant does have some explanation for the delay and the prejudice in terms of the potential criminal liability faced by Ms Mitreska does we think outweigh the prejudice that arises to HMRC. We think it is in the interests of justice for the appellant to be allowed to have its appeal heard.” (Helianthus (London) Ltd v. HMRC [2014] UKFTT 52 (TC), §52, Judge Raghavan).
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- One alternative assessment not appealed because it was wrongly believed to be correct
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“The argument of counsel for the taxpayers was that Mr Coren could not in good conscience have appealed against the assessment for capital gains tax because he had always accepted that the gains were capital gains…Counsel for the taxpayers submitted that on the proper construction of that section they could not put forward a reasonable excuse which they had when they received the assessments which he says was the relevant time. He may be right in his construction that the relevant excuse must be one which they had when they got the assessments; but to my opinion they appear to have had (although that will be for the commissioners to decide) a sound excuse, namely that they thought they were only liable for capital gains tax and not for income tax.” (Bye v. Coren [1986] STC 393 at 395 - 396 per Lawton LJ).
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- Late appeal same as existing appeals
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"[51] Thirdly, considering all the circumstances of the case, we accept the finding of the FTT that Octagon’s case was neither very strong nor very weak. We also accept that Octagon would suffer considerable prejudice if it were not able to contest the Landfill Tax assessment of some £57m. On the other hand, we accept that HMRC does suffer some prejudice by having to contest an appeal which it thought had been concluded, albeit that that prejudice is somewhat self-inflicted: HMRC should have realised that its statements to Octagon in September, October and November 2016 were, at the very least, ambiguous. Moreover, the extent of the prejudice suffered by HMRC in having to contest what is probably a fact-intensive appeal in respect of the Landfill Tax assessments is reduced by the knowledge that essentially the same factual matrix is already under appeal in relation to the VAT assessments. Therefore, considering all the circumstances and bearing in mind the need to observe time limits, we consider that the balance lies in favour of Octagon." (Octagon Green Solutions Limited v. HMRC [2023] UKUT 268 (TCC), Judges Rupert Jones and Brannan)
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“Taking into account the circumstances as a whole I consider that the fairest way to deal with this application is to give the Appellant permission to appeal the status of Mr Smith for 2012-13 where the status of Mr Black is already in issue.” (George & Dragon (Aysgarth) Limited v. HMRC [2017] UKFTT 461 (TC), §51, Judge Cannan).
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“Despite the majority of the factors weighing against the appellant, we considered that in the circumstances of hearing seven other appeals on the same issue and determination of the eighth appeal requiring no further time or resources, the lack of substantial prejudice to HMRC should weigh in the appellant’s favour.” (Drinks Stop Cash and Carry Ltd v. HMRC [2016] UKFTT 730 (TC), §122, Judge Rupert Jones).
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“Notwithstanding the reasons given by the respondents as to why we should not permit the late appeal, and the fact that no reasons were given by Mr Howard on behalf of Dr Montshiwa as to why we should do so, we do give Dr Montshiwa permission to appeal, and notify that appeal, out of time for the following reasons:
(1) Although the delay is considerable [13 months], no prejudice has been caused to the respondents, (nor will it be caused) by granting permission and hearing the appeal. HMRC have not submitted that there have been any wasted costs (or will be any wasted costs) associated with this late appeal. And there are, nor will there be, adverse consequences for the respondents by granting permission.
(2) If the appeal had been made and notified on time, we have no doubt that it would have been held over pending clarification of the claim for special relief. It would not have been heard independently of that claim. One reason for this is that the surcharges are calculated as a percentage of the tax due. If, therefore, this Tribunal decides (as it has) that the tax due should be reduced, then the surcharges must be reduced too. It is inconceivable that a Tribunal would hear an appeal against the surcharges independently of the hearing for the claim for special relief. In these circumstances, the appeal against the penalties would also be stood over in order that all the relevant issues could be heard at one time. So even if the appellant had made an in time appeal and notification against the penalties and surcharges, the hearing itself in relation to those two matters would not have taken place until now.
(3) We recognise that one reason for imposing time limits is to ensure that there is finality in litigation. But, as mentioned above, in the circumstances of this case finality as regards the penalties and surcharges would have had to wait until finality was achieved in respect of the special relief claim.” (Montshiwa v. HMRC [2015] UKFTT 544 (TC), §141, Judge Popplewell).
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But see contrary examples below.
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- Appeal would have been stayed behind higher appeal and merits strong: late appeal allowed
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“I have no doubt that even if the appellant had appealed those penalty notices in time, and then notified his appeal to the tribunal, that appeal would have been stayed pending the outcome of Donaldson and it would only have been once Donaldson had been decided that this appeal would have proceeded (as in the case of many thousands of appeals which have been dealt with by the First-tier Tribunal over the last six to twelve months) …So in fact nothing has been lost by the appellant's failure to appeal in time. It would have made very little difference to the timing of the hearing of the appeal. The principle of ensuring finality litigation has not been compromised to any, or any material, extent.” (Hinchliffe v. HMRC [2018] UKFTT 186 (TC), §30, Judge Popplewell but see Martland v. HMRC [2018] UKUT 178 (TCC)).
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- Appeal would have been stayed behind higher appeals and some reasons for delay
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"[25] (1). Once the circumstances have been identified, they must be balanced. The consistent message from Denton, Martland and Katib is that particular weight is to be given to two factors: (1) for litigation to be conducted efficiently and at proportionate cost; and (2) to enforce compliance with rules, practice directions and orders.
(2). The following factors favour allowing the Application:
(1) there are reasons for the delay;
(2) if the Application were to be refused, Mr Jordan would be required to pay HMRC £2501.00 which is a significant sum to him and his family;
(3) allowing the Application will have little impact on the litigation with HMRC, or on other Tribunal users, because of: (a) the appeal would be stayed behind the further appeal of Wilkes which is progressing in any event; and (4) the time already spent by HMRC considering the evidence and the issues involved in this appeal, to the extent of filing a Statement of Case would not be too onerous.
Of those three factors, I hold significant weight to the third.
On the other side of the scales is Mr Jordan's failure to meet the statutory time limit which is a matter of particular importance and the prejudice to HMRC in not reaching finality at this stage. However, I must also take into account that there were reasons for the delays and the contact which Mr Jordan had with HMRC by telephone.
[26] Having carried out the weighing exercise and giving due weight to the lateness, the balance clearly favours Mr Jordan, and I grant him permission to appeal." (Jordan v. HMRC [2022] UKFTT 12 (TC), Judge Fionagh Green)
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- Right to appeal concealed by employee responsible for defaults
“The explanation for the delay is a good one. The directors were not able to appeal as they did not know about it. We take on board Mrs Shepherd’s point that TDY was still able to appeal within time as Mr Triffitt was in fact authorised to deal with VAT matters. However, this does not take into account the important circumstance that he was concealing the position.” (The Damn Yankee Ltd v. HMRC [2016] UKFTT 768 (TC), §28(3), Judge Chapman).
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- Appeal by executor involving complex points of IHT where both parties were ready to address substantive appeal
“With the benefit of the points made to us by both parties we conducted the balancing exercise required of us in these circumstances. In the end we were persuaded to grant the Appellant’s application for the following reasons. Although the various delays were considerable the technical arguments were not at all straightforward, the Appellant had not been aware of what advice had been given to the Deceased nor what she had done after receiving that advice and the documents she entered into were not easy to understand. We noted that the Respondents dealt with the August 2014 IHT 200 after it was submitted to them without informing the Appellant that it was too late for him to raise the question whether or not the residential property had formed part of the estate of the Deceased. Both parties attended the hearing prepared to present their case that day without asking for further time. The work involved in presenting the case was very small compared with the time that had already been spent by both parties in preparing to do so. We found that the balance was in favour of allowing the Appellant to present his case. We could see very little disadvantage for the Respondents by the time the application was made to us and we granted the Appellant his application and moved on to consider the substantive appeal.” (Sussman v. HMRC [2016] UKFTT 523 (TC), §7).
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- Simple appeal where determining substantive appeal would take the same time as determining extension of time
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“This case took about two hours. In that time (or at least in half a day) we may well have been able to determine the substantive appeals and given finality to everyone.” (Massey v. HMRC [2016] UKFTT 616 (TC), §55).
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- Covid illness
"[33] I do not agree with Border Force that no good reason for the delay has been established or evidenced. There is a positive Covid-19 test demonstrating that the Appellant had Covid-19 on 22 February 2022. The documents on the Tribunal file show that the Appellant is middle aged, and I take judicial note of the fact that, the older a person is, the more likely it is that they will be adversely affected by Covid-19. I also consider it to be well-established that many people do suffer significant ill health after contracting Covid-19, and that there are people who do not appear to recover fully from Covid-19 years after first becoming infected. I agree with Border Force that the Appellant has not explained the precise nature of the symptoms he suffered, and I accept that Covid-19 is an illness with many symptoms. However, unless the Appellant had become so ill that he required hospital treatment (which is not suggested), I do not know what further medical evidence would be expected in a case of a slow recovery from an illness that is known to have no treatment. I do not see any reason to doubt that the Appellant was ill, as he stated, and that his ill health was such that he was prevented from making an appeal (in a language other than his mother tongue) until he had sufficiently recovered from Covid-19. In making this assessment, I have taken into account that the Appellant appears to have met other deadlines in time, both when he appealed to Border Force and when he sought a review from Border Force, and also in meeting the deadlines set by the Tribunal. That timeous action on other occasions adds credibility to the Appellant’s implied argument (which I accept) that he would have met the appeal deadline of 6 March 2022 had he not been taken ill on 22 February 2022 and remained ill for a time thereafter.
...
[39]...The period of delay is significant but the Appellant has provided a good reason for at least 29 of the 34 days of delay and I consider there is an explanation for the remaining five days. I have concluded that the balance of factors is in favour of the Appellant, and that he should be granted permission to make a late appeal. " (Mikalic v. DBF [2023] UKFTT 377 (TC), Judge Bailey)
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- T attempted to appeal in time using the wrong form
"[36] Having considered all of the evidence, cumulatively, we are satisfied that the balance between the prejudice to the Appellant, the prejudice to HMRC and the administration of justice through the finality of litigation falls firmly on the side of an extension of time being allowed. This is because we are satisfied that the Appellant rectified the error in respect of the wrong appeal form being used in a timely manner, and clearly intended to challenge the decision immediately upon receipt of the penalty notice. We have balanced the competing interests and the arguments presented by the parties." (Cohen v. HMRC [2024] UKFTT 707 (TC), Judge Manyarara)
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Late appeal denied
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- Honest belief that adviser was taking action but unreasonable failure to check whether this was the case
"[35] Having decided above that the reason for the delay was a genuine belief that RPC were acting on their behalf, I must consider whether, in this balancing exercise, that belief was a reasonable one such as to constitute a good reason for the delay. While it may be true that RPC were taking actions on their behalf through this long period, I note that the letter of 27 May 2022 expressly refers to the taxpayer's need to contact their advisers to discuss what to do next. This should have indicated to them that they should at least check that RPC were continuing to take the necessary actions." (O'Donnell v. HMRC [2024] UKFTT 587 (TC), Judge McGregor)
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- Three months late with no good reason (extension refused)
“We have reached the conclusion that in the circumstances of a delay of such significance and seriousness in making an appeal to the FTT with no good reason it would not be in the interests of justice to permit the appeal in relation to Decision 9 to proceed out of time.” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §99, Judges Berner and Falk)
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- Reliance on adviser’s assurances ceasing to be reasonable
“Against Mr Hall is the length of the delay; a period of nearly four years is by any standards “significant and serious”. Whilst that, in itself, would not necessarily be fatal if there was a good explanation for the delay, we consider that there came a point, long before January 2015, when it was no longer reasonable for Mr Hall to rely on Mr Harris’ assertions in the light of all the evidence pointing the other way. Mr Hall could and should have contacted the tribunal himself much sooner than he did. There accordingly came a point when the explanation ceased to be a good one. Whilst it is difficult to state any exact point at which Mr Hall’s reliance on Mr Harris ceased to be reasonable, this must have been the case by 5 September 2014 at the latest.” (Hall v. HMRC [2016] UKFTT 99 (TC) – permission refused)
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- Belated change of adviser leading to different advice - no extension after five month delay
“It seems to us that this is exactly the sort of situation that the time limit is intended to prevent from occurring. It cannot be right that a taxpayer who initially accepts an assessment and does not therefore appeal can take further advice months later and then try to lodge an appeal based on the new advice he has received.” (Rees v. HMRC [2016] UKFTT 784 (TC), §79, Judge Vos).
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- Could not afford to pay for adviser to file notice of appeal
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"Mr Benisi sought to explain part of the delay that had occurred in his case by asserting that he did not have sufficient funds at his disposal to enable him to instruct solicitors to file a notice of appeal at the right time. In my view shortage of funds does not provide a good reason for delay. I can well understand that litigants would prefer to be legally represented and that some may be deterred by the prospect of having to act on their own behalf. Nonetheless, in the modern world the inability to pay for legal representation cannot be regarded as providing a good reason for delay. Unfortunately, many litigants are now forced to act on their own behalf and the rules apply to them as well." (R (on the application of Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633, §43, applied in Rees v. HMRC [2016] UKFTT 784 (TC), §80, Judge Vos)
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- Failure to follow up mistaken belief that appeal submitted unreasonable, late appeal refused
“Even if the appellant mistakenly thought that his accountants had submitted an appeal against all assessments, it appears he did not take any action at all to follow up with them as regards what was happening with any such appeal. It lacks credibility that, in particular, given the large amounts of tax in issue, the appellant would not take any action to check with his accountant precisely what had been appealed and the outcome of that appeal.” (Khan v. HMRC [2017] UKFTT 731 (TC), §58, Judge Morgan).
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- Serious prejudice outweighed by delay and lack of good reason
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“I find there to have been a delay of over 10 months in notifying the appeal to the Tribunal, a delay which on any view is “serious and significant”. The explanation for the delay, such as it is, is extremely weak. The appellant will undoubtedly suffer significant prejudice if his appeal is not permitted to proceed, but after considering the length of the delay and weighing in the balance the reasons given for it and the prejudice which would potentially be suffered by both parties (depending on my decision), I am satisfied that this is a case in which the Tribunal’s discretion to admit a late appeal should not be exercised.” (Panter v. HMRC [2018] UKFTT 589 (TC), §29, Judge Poole)
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- Late appeal same as existing appeal (therefore no additional cost etc) outweighed by length of delay and lack of good reason
“In principle, it seems to us that the question whether permission should be granted should be determined independently of the position on other appeals and that they are of limited, if any, relevance. If a clear conclusion is reached that it is not appropriate to grant permission to bring a particular appeal on its own merits, taking account of all the circumstances relating to that appeal, we do not think it right that the result should change solely because, as a result of our decision on the other appeals, it could conveniently be heard with them. The existence or otherwise of related appeals ought not to be a material factor. If it were, then the question whether an appeal that would otherwise not be permitted to proceed could be allowed to do so could turn on the happenstance that, at the time the application is considered, there are appeals to which it might be joined. That would be capable of operating unfairly as between taxpayers in otherwise identical situations, some of whom have concurrent appeals and others of whom do not.” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §100, Judges Berner and Falk approved an applied in HMRC v. Sharya UK Ltd [2019] UKUT 143 (TCC) §106 “limited, if any, relevance”).
“It is true that (a) this [appeal] can be swept into the existing appeal without extra time or costs and (b) refusing a late appeal inevitably risks the payment of money which may not be due, but in my judgment these considerations are insufficient to outweigh the factors against giving permission, namely: the very significant length of the delay; the lack of any good reason for not appealing within the time limit and the need to ensure fairness as between taxpayers.” (Citipost Mail Ltd v. HMRC [2015] UKFTT 252 (TC), §79).
A fortiori where the similar appeal is not related to T
“Nevertheless, I do not consider that the fact that there are similar cases which may be appealed should be regarded as meaning that HMRC cannot be entitled to regard the matter as closed, nor should that fact mean that time limits can be breached.” (Martland v. HMRC [2016] UKFTT 717 (TC), §44, Judge Fairpo).
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- effect of pandemic on professional advisers did not justify 7 month delay
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"[33] It is accepted that the delay of seven months is serious and significant within the context of the case. No authority has been produced supportive of any Tribunal’s acceptance of pandemic reasons for a seven-month delay by a professional firm in submitting an important document to a Tribunal.
[34] I accept that there are certain circumstances where the effects of the pandemic could give rise to meritorious reasons for a delay. However, there is an absence of evidence in this case to demonstrate any specific circumstances or detailed effects of the pandemic that gave rise to this delay. On the basis of objective reasoning, and taking into consideration all the circumstances of this case, I do not accept the generic pandemic excuse given to be a good reason for such a delay." (Kiernander v. HMRC [2022] UKFTT 337 (TC), Judge Sukul)
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- Overlap with existing appeal reduces prejudice but not sufficient
The overlap between the TEIDR Appeal and the matters which arise in the VAT Appeal and the Penalty Appeal means that I consider there would be less prejudice to HMRC in my granting permission for a late appeal than there would be if the other appeals had not been made. However, giving permission would nevertheless increase the resources HMRC has to devote to the various matters (in totality), and it cannot be said that there would be no prejudice to HMRC. HMRC will have to devote additional resources to the TEIDR Appeal, in circumstances where it had (reasonably) considered the Exclusion Decision to be final." (Sims Group UK Ltd v. HMRC [2024] UKFTT 194 (TC), Judge Zaman)
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- continuing to argue with HMRC rather than submit appeal even when HMRC pointed out lack of appeal
"[51] Having weighed all of these factors I have concluded that I am, in the end, not persuaded to grant permission. I consider that had the appeal been notified within a reasonable period after 25 January 2022 I would have granted permission firstly because the period of delay would have been short and secondly because I consider that the conflict in the letter as to dates and the without prejudice correspondence could have created an impression to the representative and his client that the time limit was not running. However, by 25 January 2022 it was clear that HMRC considered the time limit to have expired. Rather than seek to remediate the position as soon as possible the representative continued to lock horns with what he considered to be the outrageous conduct of HMRC. He did not appeal but continued to make complaint to HMRC." (Cranham Sports LLP v. HMRC [2023] UKFTT 373 (TC), Judge Brown KC)
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- attempting to appeal before decision issued and then doing nothing in response to HMRC communications
"[100] In any event, even if he had sent those letters, and I do not accept that he did, the letters are irrelevant. There was no appealable decision issued until 29 April 2019 so he could not appeal in advance of that date. Furthermore, the “chaser letter” was sent 195 days after the appealable decision which is a serious and significant delay. In addition, neither letter contained the Grounds of Appeal in accordance with section 31A(5) TMA 1970.
[101] Even the letter of 1 June 2020, which HMRC have very liberally treated as being an appeal, has not complied with the provisions of section 31A(a)-(c) and section 31A(5) TMA." (Vekaria v. HMRC [2023] UKFTT 288 (TC), Judge Scott)
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Appeal time limit not contrary to EU law principle of effectiveness
"[60] As we have discussed above, Mr Maas made various submissions to the effect that Mr Hewitt had not been provided with an effective remedy in breach of the EU law principle of effectiveness. In summary, those submissions were that:
(1) Mr Hewitt did not have an effective remedy because the 30-day time limit began to run and expired at a time at which Mr Hewitt could not have been aware that he had an enforceable right;
(2) Mr Hewitt did not have an effective remedy because the 30-day time limit began to run and expired before the date on which the Mr Hewitt’s right was clearly established by the decision of the CJEU in Shields CJEU; and
(3) the relevant provisions of the Principal VAT Directive had not been transposed into UK domestic law, and, in those circumstances, the principle of effectiveness prevented HMRC from relying upon any time limit against Mr Hewitt’s claim to enforce directly effective EU law rights.
[61] For the reasons that we have given above, we reject all of those submissions. In summary:
(1) The fact that a time limit or limitation period on claims begins to run and expires before the date on which the claimant is aware that they had an enforceable right does not breach the principle of effectiveness (Class 8 [88]-[90], [94]).
(2) The case law authorities also demonstrate that the fact that a time limit or limitation period for appeals begins to run and expires before the date on which the claimant’s right is clearly established by a decision of the CJEU does not prevent the claimant’s right to appeal being regarded as an effective remedy (Leeds [43], FII [151], Caterpillar [52]). It is nothing to the point that Mr Hewitt may have regarded the prospects of success at the time of the breach as vanishingly small (Caterpillar [48]).
(3) Even if it could be argued that the relevant provisions of the Principal VAT Directive have not been properly transposed into EU law, for the reasons that we have given, that would not prevent HMRC from relying upon a reasonable time limit in domestic law (Leeds [41])." (Hewitt v. HMRC [2021] UKUT 231 (TCC), Judge Scott and Judge Greenbank)
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Late notice of higher appeal
Applications for PTA not usually copied to other party
“Such applications for permission to appeal are not normally copied to the other party to the appeal. Thus it could not be assumed that either Mr West or Mr Slater would have been aware of the contents of the PTA Application.” (West v. HMRC [2016] UKFTT 769_2 (TC), §9, Judge John Clark).
Importance of parties knowing whether decision is final
“The effect of Rule 39(4)(b) is plain; it assumes that an application for permission to appeal should not be admitted unless the Tribunal sees fit to use its discretion under the Tribunal Rules to allow an extension of the normal 56 day period. It is essential for parties to know whether a decision of the First-tier Tribunal is or is not to be treated as final. The question when they should be provided with a definite indication as to the position depends in part on the next of the points raised in Data Select.” (West v. HMRC [2016] UKFTT 769_2 (TC), §39, Judge John Clark).
Rules relating to late applications mean party cannot immediately assume decision is final
“The very existence of Rule 39(4) shows that the possibility of an application being made for permission to appeal remains open after the expiry of the 56 day period, and all the more so where the time which has elapsed since that expiry is not particularly lengthy, subject to the decision in the individual case whether or not extension of time should be granted following the relevant party’s application.” (West v. HMRC [2016] UKFTT 769_2 (TC), §44, Judge John Clark).
HMRC needing to consult internally not a good reason
“HMRC’s reasons for the delay are set out in their email message reproduced at [6] above. In summary, their reasons amount to this; in colloquial terms, they had not been able to “get their act together” within the normal time for lodging an application for permission to appeal. In my view, an organisation as substantial as HMRC should be ready to deal with Tribunal decisions in a prompt and appropriate fashion at whatever point in the year such decisions are released. I am aware that HMRC have argued for a strict approach in cases where they have sought to resist applications by other parties for extension of time or for reinstatement of appeals which have been struck out, although as I have stated, these have generally involved lengthier delays. I note the reference by Ryder LJ to irony in BPP at [36]. The point in issue here is not dissimilar. I do not consider that HMRC’s explanation demonstrates adequate reasons for the delay, given the resources available to them.” (West v. HMRC [2016] UKFTT 769_2 (TC), §43, Judge John Clark).
Take into account party’s experience and resources
“Thus it is not appropriate to apply a different standard to HMRC, but their experience and resources should be taken into account in considering all the circumstances.” (West v. HMRC [2016] UKFTT 769_2 (TC), §52, Judge John Clark).
Financial effect of refusing to extend time for HMRC on T due to likelihood of appealing that decision
“One consideration on which I place considerable weight is the possible effect on Mr West if I were to decide to refuse to grant the extension of time to HMRC. I consider that there would be a strong likelihood that HMRC would seek permission to appeal against this decision, and that in all probability such permission would be granted. In the course of his evidence at the hearing of his appeal, Mr West stated that he was on benefits. There was no reason to test that evidence or seek corroboration of it. If that evidence could be treated as sufficient evidence as to his financial position, there may be a risk that he could be put to further expense in the event that he or Mr Slater considered it necessary to be involved in any proceedings relating to an appeal by HMRC against this decision.” (West v. HMRC [2016] UKFTT 769_2 (TC), §57, Judge John Clark).
Prejudice to HMRC
“Whilst serious, the denial of the right of appeal has to be weighed against the position in which HMRC find themselves by reason of the delay. It is necessary for HMRC to manage their litigation and to undertake their tax collections in an organised way. A late appeal prejudices them in both respects, as is demonstrated by the fact that it was at about the time when HMRC sought to collect the tax that the deficiencies in the case stated and the appeal process came to light.” (Woodpecker Ltd v. HMRC [2009] EWHC 3442 (Ch), §54).
Late change of legal advice not good reason
“He had 56 days to appeal; he had the choice of whether to accept Mr Horler’s advice not to appeal; he had the right to seek advice from a new adviser. Ultimately, he chose to seek new advice, but long after the time limit had expired. I have been given no good reason why he took so long to seek alternative advice.” (Clarke v. HMRC [2018] UKFTT 123 (TC), §52, Judge Mosedale).