Stephen Ray v The Commissioners for HMRC
[2024] UKFTT 141 (TC)
Paul Needham v The Commissioners for HMRC
31 October 2024
[2024] UKFTT 994 (TC)
First-tier Tribunal
Mr. Needham appealed late against HMRC tax penalties. The court considered whether to let him appeal despite the delay. Even though he had trouble communicating with HMRC, the court said the delay was too long and dismissed his appeal. The court also couldn't deal with parts of his appeal.
Key Facts
- •Mr. Needham's appeal against late payment and late filing penalties was filed almost ten years late.
- •The penalties relate to income tax returns for the years 2005-06 to 2009-10, and a 2011-12 return.
- •Mr. Needham claimed he didn't receive initial correspondence from HMRC and struggled to resolve the issue despite contacting them.
- •HMRC did not agree to the late appeal.
- •The total sum in dispute was £11,745.08, though the appeal only concerned penalties, not the underlying tax assessment or interest.
Legal Principles
The First-tier Tribunal (FTT) has discretion to admit late appeals, but the starting point is that permission should not be granted unless it should be on balance.
Martland v HMRC [2018] UKUT 178 (TCC)
When considering a late appeal, the FTT should follow a three-stage process: (i) assess the length of delay; (ii) establish the reasons for the delay; (iii) evaluate all circumstances of the case, balancing the reasons for the delay against the prejudice to both parties.
Denton (implicitly referred to in Martland)
The FTT should consider the importance of efficient litigation, proportionate costs, and respect for statutory time limits.
Martland v HMRC [2018] UKUT 178 (TCC)
The FTT should not undertake a detailed analysis of the underlying merits of the appeal.
Hysaj, R (in the application of) v Secretary of State for the Home Department [2014] EWCA Civ 1633
A hopeless appeal should not be admitted.
Martland v HMRC [2018] UKUT 178 (TCC)
Appeals against late filing and late payment penalties under Schedule 55 and 56 of the Finance Act 2009 are treated as appeals against an assessment of the tax concerned (income tax in this case).
Finance Act 2009, Schedule 55 paragraph 21, Schedule 56 paragraph 14
The right to appeal against HMRC decisions is under s 31 Taxes Management Act 1970 (TMA), with a 30-day time limit, extendable under s 49 TMA if HMRC agree or the tribunal gives permission.
Taxes Management Act 1970, sections 31, 31A, 49
The Tribunal lacks jurisdiction to hear appeals against interest or HMRC determinations.
TMA s31 and Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, Rule 8(2)(a)
Outcomes
Mr. Needham's application to admit his late appeal was dismissed.
The significant delay (almost 10 years) was not adequately explained, despite Mr. Needham's claim of difficulties communicating with HMRC. While there was some sympathy for his situation, the Tribunal found it more likely than not he was aware of his right to appeal sooner. Furthermore, the Tribunal lacked jurisdiction to consider the appeal aspects relating to interest and HMRC determinations.