Key Facts
- •Heaven Dry Cleaners Limited (HDCL) appealed late against corporation tax (CT), value added tax (VAT) assessments, and CT penalties.
- •HMRC opposed the late appeal for CT and VAT, except for the CT penalties.
- •HDCL had never filed VAT returns for the periods assessed.
- •Significant delays occurred in notifying appeals, exceeding statutory time limits.
- •HDCL's sole director, Mr. Nikoukarmojarad, claimed non-receipt of crucial HMRC correspondence.
- •HMRC raised concerns about HDCL's lack of response to multiple communications.
- •The Tribunal considered the three-stage Denton test for late appeals.
- •The Tribunal found HDCL's director was aware of the CT review conclusion but failed to appeal due to financial constraints.
Legal Principles
Permission for late appeals should not be granted unless the FTT is satisfied on balance that it should be. The Denton test should be applied.
Martland v HMRC [2018] UKUT 178 (TCC)
The Denton test involves assessing the length of delay, reasons for the default, and all the circumstances, balancing prejudice to both parties.
Denton v TH White Ltd [2014] EWCA Civ 906
Time limits for appealing tax assessments are generally 30 days after the notice of assessment. Extensions may be granted with permission.
Finance Act 1998, Taxes Management Act 1970, Value Added Tax Act 1994
An appeal against a VAT assessment under section 83(1)(p) VATA94 only applies if the appellant has made a return for the period assessed.
Value Added Tax Act 1994, section 83(1)(p)
Section 7 of the Interpretation Act 1978 creates a rebuttable presumption that a properly addressed, pre-paid, and posted letter was delivered; this presumption can be challenged.
Interpretation Act 1978, section 7
Outcomes
HDCL's application for permission to make a late appeal in respect of the CT review conclusion letter is refused.
Significant delay, lack of good reason for the delay, and prejudice to HMRC.
HDCL's appeal against the VAT registration decision is struck out.
Appeal was impermissible under section 83G(3)(a) VATA94 until HMRC provides a notification of the conclusion of their review, which they haven't done.
HDCL's appeal relating to the VAT assessment is struck out.
No right of appeal under section 83(1)(p) VATA94 as HDCL never filed VAT returns.
HDCL's appeal relating to the CT penalties is stayed.
Pending HMRC's review conclusion on CT penalties and VAT registration decision.