Tribunal Denies Late Appeal in Tomas v HMRC Case Over Child Benefit Charge, Emphasizing Importance of Statutory Time Limits

Citation: [2024] UKFTT 15 (TC)
Judgment on

Introduction

In the case of Paul Tomas v The Commissioners for His Majesty’s Revenue and Customs, the First-tier Tribunal (Tax Chamber) focused on an application for permission to make a late appeal concerning the Higher Income Child Benefit Charge (HICBC). The case provides a demonstrative example of how the Tribunal approaches applications for late appeals, emphasizing the importance of statutory time limits, the efficiency of litigation, and the conduct of appellants in the process of appealing HMRC decisions.

Key Facts

The appellant, Mr. Tomas, sought to challenge assessments and penalties related to HICBC, which were issued to him on 7 May 2021. The appellant initially believed he was already engaged in an appeals process with HMRC, leading to a delayed formal appeal submission on 1 October 2021, around four months after the statutory deadline for appeals. HMRC subsequently rejected his appeal for being out of time, and the Tribunal had to consider whether to permit a late appeal.

The Tribunal’s decision hinged on the application of several legal principles concerning late appeals under the Taxes Management Act 1970 (TMA 1970):

  1. Statutory Time Limits: Section 31A(4) TMA 1970 stipulates that an appeal must be lodged within 30 days of the issuance of the notice of assessment. Mr. Tomas missed this window, as his appeal came nearly four months after the deadline.

  2. Late Appeals: Section 49 TMA 1970 allows for late appeals to be made if HMRC agrees or if the Tribunal grants permission. The Tribunal applied the three-stage test from Martland v HMRC [2018] UKUT 178:

    • Establishing the delay’s length and seriousness.
    • Determining why the delay occurred.
    • Evaluating all the case’s circumstances, including the appeal’s merits and potential prejudice to both parties.

  3. Efficiency and Proportionality: The Tribunal highlighted the need for litigation to be conducted efficiently and at proportionate cost.

  4. Merits of the Case: The Tribunal briefly assessed the merits of Mr. Tomas’s underlying appeal, concluding there were limited avenues for success, especially because the assessments were considered “protected” under section 97 of Finance Act 2022 due to the lack of a timely appeal.

  5. Reasonable Belief: Mr. Tomas’s belief that he was in an ongoing appeals process with HMRC was examined. However, the clarity of HMRC’s notifications and the appellant’s vague recollections undermined this belief’s credibility as a reason for the delay.

Outcomes

Following the Martland guidance, Tribunal Judge McGregor determined the delay to be serious and significant: nearly four months past HMRC’s extended concessionary period. The reasons provided by Mr. Tomas for his delay were deemed unsatisfactory, and the assessment of the underlying appeal indicated limited prospects of success.

Considering these factors, Judge McGregor refused the application for permission to bring a late appeal. This highlighted that statutory deadlines are stringent, and misunderstanding the appeals process is generally insufficient to justify a late appeal.

Conclusion

This decision underlines the importance of adhering to time limits and the difficulty of overturning HMRC’s decisions when these limits are not met. The judgment also illustrates that while the Tribunal is willing to consider the appellants’ circumstances, clear statutory procedures, and the strength of the underlying case, are pivotal in deciding whether to allow late appeals. Legal professionals should advise their clients on the necessity of timely action and the challenges that may arise from filing a late appeal against HMRC’s decisions.