Jason Nicholas James v The Commissioners for HMRC
[2023] UKFTT 661 (TC)
David George Davies v The Commissioners for HMRC
25 July 2024
[2024] UKFTT 704 (TC)
First-tier Tribunal
Someone didn't file their taxes on time. They blamed their accountant and COVID. The tax court said that wasn't good enough, because the delay was too long, and it's important to file taxes on time. So, they couldn't challenge the tax bill.
Key Facts
- •Mr. David Davies applied for permission to make a late appeal against income tax assessments and penalties for 2011-12 to 2017-18.
- •HMRC conducted a compliance check on Mr. Davies starting in July 2017, discovering unreported income.
- •Assessments and penalties were issued on October 9, 2019.
- •The appeal application was submitted to HMRC on October 28, 2022 (over two and a half years late).
- •Mr. Davies' accountant, Mr. X, is cited as contributing to the delay.
- •Mr. Davies' representative, RAL, argued that Mr. X's failure and the impact of COVID-19 contributed to the delay.
- •HMRC argued that the taxpayer's agent's failure is not a reasonable excuse, and that the delay was serious and significant.
Legal Principles
The Tribunal has discretion to allow a late appeal under section 49 of the Taxes Management Act 1970 (TMA 1970) and Rule 20 of the FTT Rules.
Section 49 TMA 1970, Rule 20 FTT Rules
In late appeal applications, the Tribunal should follow a three-stage process from *Martland v HMRC* [2018] UKUT 178 (TCC): (1) assess the delay, (2) establish the reason for the delay, and (3) balance the merits of the reason(s) against the prejudice to both parties.
*Martland v HMRC* [2018] UKUT 178 (TCC)
A taxpayer's agent's failure is not, in itself, a reasonable excuse for a late appeal.
*BPP Holdings v HMRC* [2016] EWCA Civ 121
Outcomes
The application for a late appeal was refused.
The Tribunal found the delay to be serious and significant, and that Mr. Davies had not established a good reason for the delay. While acknowledging the potential prejudice to Mr. Davies, the Tribunal weighed this against the prejudice to HMRC and the importance of respecting statutory time limits. The merits of the underlying appeal were deemed too complex to assess within the context of the late appeal application.