Jonathan Manguiat v The Commissioners for HMRC
[2023] UKFTT 312 (TC)
TJ Stout v The Commissioners for HMRC
1 October 2024
[2024] UKFTT 906 (TC)
First-tier Tribunal
Mr. Stout was late appealing tax bills due to mental health problems and difficult life circumstances. The judge understood and allowed his late appeal, but put it on hold until another similar case is decided, to avoid unnecessary work.
Key Facts
- •Mr. Stout seeks permission to appeal out of time against discovery assessments for High Income Child Benefit Charge (HICBC) totaling £8,223.00 for 2015/16, 2016/17, and 2017/18.
- •The assessments were issued on December 24, 2019, and the initial appeal to HMRC was made on February 12, 2020.
- •Mr. Stout's delay in appealing to the Tribunal was due to mental health issues (ADHD and GAD), causing 'analysis paralysis' and exacerbated by various life stressors.
- •HMRC initially upheld the HICBC assessments but withdrew penalty assessments.
- •Mr. Stout's appeal to the Tribunal was made on August 8, 2023, significantly outside the statutory time limit.
- •The case hinges on the validity of the section 29 TMA assessments for HICBC in light of *HMRC v Jason Wilkes* [2022] EWCA Civ 1612 and *Fera v HMRC* [2023] UKFTT 08986 (TC).
Legal Principles
The Tribunal may grant permission to appeal late under section 40(2)(b) Taxes Management Act 1970 if HMRC refuse to do so.
Taxes Management Act 1970, section 40(2)(b)
Principles in *Martland v HMRC* [2018] UKUT 178 (TCC) apply to late appeal applications. A three-stage process is used: (1) assessing the delay, (2) establishing the reason for the delay, and (3) balancing all circumstances, including prejudice to both parties.
*Martland v HMRC* [2018] UKUT 178 (TCC)
The importance of finality in tax litigation and the efficient use of resources.
*HMRC v Kafeez Katib* [2019] UKUT (TC) 0189 and *Data Select Ltd v Revenue & Customs Commissioners* [2012] UKUT 187
In considering reasonable excuse, the taxpayer's attributes must be taken into account (*Perrin v HMRC* [2018] UKUT 156).
*Perrin v HMRC* [2018] UKUT 156
Section 29 TMA assessments for HICBC may be invalid if an appeal was made before 30 June 2021 challenging the lack of failure to make a return of taxable income (*HMRC v Jason Wilkes* [2022] EWCA Civ 1612; *Fera v HMRC* [2023] UKFTT 08986 (TC)).
*HMRC v Jason Wilkes* [2022] EWCA Civ 1612; *Fera v HMRC* [2023] UKFTT 08986 (TC)
Outcomes
Permission to appeal late was granted.
The Tribunal accepted Mr. Stout's explanation for the delay, based on his mental health issues and the significant stressors he faced. The potential invalidity of the assessments under section 29 TMA, as per the *Fera* case, further supported granting the appeal.
Appeal stayed pending the outcome of *HMRC v James Fera*. If there are disputes on the application of *Fera*, the appeal will be heard by the same judge.
To ensure consistency and efficiency in light of the ongoing legal uncertainty around section 29 TMA assessments for HICBC.