Lalji Vekaria v The Commissioners for HMRC
[2023] UKFTT 288 (TC)
Louise Duncan v The Commissioners for HMRC
7 August 2023
[2023] UKFTT 697 (TC)
First-tier Tribunal
Louise forgot to appeal her tax bill on time. The tax office was right to add the missing money, and the judge wouldn't let her appeal late. Although, the judge suggested the tax office might be kind and waive any extra charges because of a mistake on their part.
Key Facts
- •Louise Duncan's 2017 tax return omitted income from two employers (TLT LLP and Metcalfe's).
- •HMRC issued a closure notice on July 11, 2018, amending her return to include the missing income.
- •Duncan failed to appeal within the 30-day timeframe (by August 10, 2018).
- •She appealed to HMRC on June 30, 2022, nearly four years late.
- •Duncan's accountant only received a P60 from one employer, and the other income was omitted from her tax return.
- •The omission was partly due to HMRC updating Duncan's tax records resulting in a tax rebate and subsequent changes to her tax code and liability.
- •Duncan's late appeal was based on overlooking the appeal rights in the closure notice letter.
- •HMRC rejected her late appeal on July 18, 2022
Legal Principles
Appeals against amendments to self-assessment tax returns must be made within 30 days of the amendment notice, with permission granted for late appeals by HMRC or the tribunal.
Section 31(1)(a) Taxes Management Act 1970 (TMA)
The tribunal exercises judicial discretion in granting permission for late appeals, considering factors such as the length of delay, reasons for the delay, and prejudice to both parties.
Martland v HMRC [2018] UKUT 178 (TCC)
In considering late appeals, the tribunal must balance the need for efficient litigation and respect for statutory time limits with the reasons for the delay and potential prejudice.
HMRC v BMW Shipping Agents [2021] UKUT 0091
HMRC has wide powers to collect and manage revenue.
Section 1 TMA, Section 5 and 9 Commissioners for Revenue and Customs Act 2005, R (on the application of Wilkinson) v Inland Revenue Commissioners [2006] STC 270
Outcomes
The tribunal rejected Duncan's application for permission to make a late appeal.
The delay of nearly four years was deemed serious and significant. While the reasons were understandable, they did not outweigh the seriousness of the delay. Furthermore, the tribunal found the underlying appeal lacked merit.
Even if the late appeal had been granted, the appeal against the amendment would have been dismissed.
The appellant's tax return clearly omitted income which should have been included; therefore, there was no merit to the appeal.