Graeme Wardrop v The Commissioners for HMRC
[2024] UKFTT 178 (TC)
Stephen Ray v The Commissioners for HMRC
25 January 2024
[2024] UKFTT 141 (TC)
First-tier Tribunal
Mr. Ray was late appealing tax penalties by over five years. The court said he had no good reason for the delay and refused to hear his case because it was too late, even though he claimed he had mental health issues and had been dealing with complex legal cases. The court prioritized following the rules and not delaying other cases.
Key Facts
- •Mr. Ray received 26 notices of penalty assessment (APN penalties) in 2016 and 2017 for late payment of Accelerated Payment Notices (APNs) related to tax avoidance schemes.
- •Appeals were made within the statutory time limit for 7 of the 26 notices; the remaining 19 were appealed late.
- •The application was for permission to make these late appeals under s49 Taxes Management Act 1970.
- •Mr. Ray's delays were over five years, in some cases over six years.
- •Mr. Ray claimed various reasons for the delay, including involvement in judicial review proceedings, mental health issues, and dissatisfaction with HMRC's conduct.
Legal Principles
Three-stage test for late appeals (Martland test): (1) Assess the seriousness of the delay; (2) Determine the reasons for the delay; (3) Balance the merits of the reasons against the prejudice to both parties, considering the importance of efficient litigation and respecting statutory time limits.
Martland v HMRC [2018] UKUT 178 (TCC)
Significant weight should be given to the need for efficient litigation and the enforcement of statutory time limits.
Denton v TH White Limited [2014] EWCA Civ 906 and BPP v HMRC [2017] UKSC 55 (as applied in Martland)
A delay of more than three months in appealing a decision with a 30-day appeal period is serious and significant.
Romasave v HMRC [2015] UKUT 254 (TCC)
The Tribunal can consider the strength or weakness of the applicant's case, but should not conduct a detailed analysis of the merits.
Martland v HMRC [2018] UKUT 178 (TCC)
Lack of funds is not a reasonable excuse for failing to pay a penalty.
Paragraph 16, Schedule 56, Finance Act 2009
Outcomes
The application for permission to make late appeals was dismissed.
The extremely lengthy delay (over 5 years), lack of good reason for the delay, prejudice to HMRC and other taxpayers, and the apparent weakness of Mr. Ray's appeal all weighed against granting permission. While Mr. Ray's mental health was considered, insufficient evidence was presented to justify the delay.