People Services Solution Ltd v The Commissioners for HMRC
[2023] UKFTT 786 (TC)
YT Medical Limited & Anor v The Commissioners for HMRC
31 May 2024
[2024] UKFTT 496 (TC)
First-tier Tribunal
A company and its director appealed late against tax bills. The court decided they had reasonably tried to appeal on time, but the tax office hadn't properly sent them the initial notices. Because of this, the court let them appeal late even though the appeals were late.
Key Facts
- •YT Medical Limited and Elizabeth Oduwaiye appealed late against corporation tax and penalty assessments.
- •Assessments totaled £206,057.67 (YT Medical) and £29,120.08 (Oduwaiye).
- •HMRC argued appeals were out of time.
- •Appellants claimed improper service of corporation tax assessments and believed appeals were made earlier.
- •The Tribunal considered the appellants' application to make late appeals.
Legal Principles
The Tribunal exercises judicial discretion when deciding late appeal applications.
Martland v HMRC [2018] UKUT 178 (TCC)
A three-stage process for considering late appeal applications: (1) length of delay, (2) reasons for delay, (3) balancing exercise considering prejudice to both parties.
Denton (as referenced in Martland)
The objective reader test: Interpretation of a notice should be understood by a reasonable person in the recipient's position, considering relevant context.
Bristol & West v HMRC [2016] STC 1491
Failures by a litigant's advisor are generally treated as failures by the litigant.
Katib [2019] UKUT 0189
Outcomes
Application to allow late appeals against penalty assessments allowed.
The Tribunal found that a letter dated 6 December 2022 constituted a valid, in-time appeal against the penalty assessments.
Application to allow late appeal against the 29 November 2021 corporation tax assessment allowed.
The Tribunal found that the appellant's letter of 25 March 2022 was a valid appeal and that there was a good reason for the delay (lack of knowledge of the assessment due to improper service).
Application to allow late appeal against the 4 April 2022 corporation tax assessments allowed.
The Tribunal found that the 6 December 2022 letter comprised an appeal against these assessments, and the delay was due to a reasonable belief that an appeal had been made by their previous agent; the balance of prejudice favoured the appellant.