The Tyre Company (NI) Limited & Anor v The Commissioners for HMRC
[2024] UKFTT 461 (TC)
Recep Acar v The Commissioners for HMRC
26 February 2024
[2024] UKFTT 182 (TC)
First-tier Tribunal
Someone appealed late against a big tax bill. The court said the appeal was way too late (almost 3 years!), and there was no good reason for the delay. Even though they said it was hard to appeal online during COVID, the court wasn't convinced. The appeal was thrown out.
Key Facts
- •Recep Acar appealed against a VAT assessment of £69,094 and a penalty of £55,275, issued on 22 July 2020 and 16 December 2020 respectively.
- •The appeal was lodged almost 32 months late, on 15 March 2023.
- •Acar claimed he didn't understand the assessment, his business wasn't required to register for VAT, and HMRC didn't adequately consider his explanations.
- •HMRC's correspondence regarding the appeal was partially sent to an outdated address.
Legal Principles
The three-stage Denton test for considering late appeals applies: (1) length of delay, (2) reason for delay, (3) balancing exercise considering prejudice to both parties and the importance of respecting statutory time limits.
Denton and others v TH White Limited and others [2014] EWCA Civ 906; Martland v HMRC [2018] UKUT 0178 (TCC); Websons (8) Limited [2020] UKUT 0154 (TCC); HMRC v Hafeez Katib [2019] 0189 UKUT (TCC)
Section 73 VATA 1994 allows HMRC to make assessments for incorrect or incomplete VAT returns.
Value Added Tax Act 1994
Section 83 VATA 1994 provides a right of appeal against VAT assessments, with a 30-day time limit (extendable by HMRC). Permission for an out-of-time appeal can be granted by the Tribunal.
Value Added Tax Act 1994
Schedule 41 FA 2008 provides for penalties for failure to notify HMRC, with a right of appeal treated similarly to tax assessments.
Finance Act 2008
Outcomes
The application for permission to bring a late appeal was dismissed.
The delay was deemed very serious and lengthy (almost 32 months), with no adequate explanation provided. The Tribunal rejected the appellant's claims regarding lack of understanding of the assessment, website inaccessibility during Covid-19 lockdown, and HMRC's alleged failure to consider his explanations. Existing case law precedent was followed, and the Tribunal found no evidence to suggest the appeal had merit.