Jason Nicholas James v The Commissioners for HMRC
[2023] UKFTT 661 (TC)
Robert Crawford v The Commissioners for HMRC
24 October 2024
[2024] UKFTT 957 (TC)
First-tier Tribunal
Someone was late appealing tax penalties. The judge said it was okay because they didn't get all the notices about the penalties, and figuring out the correct amount was too complicated to throw the case out. They are allowed to continue their case.
Key Facts
- •Appeal against HMRC penalties and surcharges for late income tax payments and returns (1999/2000-2016/2017).
- •Appeals were significantly late.
- •HMRC applied to strike out appeals due to late filing and non-compliance with directions.
- •Appellant argued appeals were timely or permission should be granted for late appeal due to not receiving penalty notices and difficulty understanding tax computations.
- •Appellant accepted liability for flat-rate penalties, but disputed tax-geared penalties.
- •A significant payment (£98,000) under a debt arrangement scheme (DAS) complicated the calculation of tax liabilities.
- •Internal inconsistencies and miscalculations in HMRC's documents were alleged.
Legal Principles
Permission for late appeal is granted only if the tribunal is satisfied it should be, considering delay, reasons for delay, and prejudice to both parties. Emphasis on efficient litigation and respecting statutory time limits.
Martland v HMRC [2018] UKUT 178 (TCC)
Service of documents by post is deemed effected when the letter would be delivered in the ordinary course of post, unless contrary is proved.
Section 7, Interpretation Act 1978
Appeals against tax-geared penalties must be made within 30 days of the penalty notice issue date (section 31A TMA, sections 93 and 100 TMA).
Taxes Management Act 1970 (TMA)
Tribunals must apply the overriding objective to deal with cases fairly and justly (Rule 2, First-tier Tribunal Rules).
First-tier Tribunal Rules
Outcomes
Appellant's application for permission to appeal late was allowed.
While appeals were significantly late, the tribunal accepted the appellant did not receive many penalty notices and therefore couldn't appeal. The balance of prejudice favored allowing the appeal, given the complexity of the case and the potential for the appellant to be liable for penalties based on an overstated tax liability.
HMRC's application to strike out the appeals was dismissed.
The tribunal found that the appellant had substantially complied with the directions, despite lack of clarity regarding the DAS payment allocation. The 'Unless Order' did not automatically strike out appeals for any non-compliance, only for a failure to provide substantial compliance.