Jason Nicholas James v The Commissioners for HMRC
[2023] UKFTT 661 (TC)
Rytis Makvicius v The Commissioners for HMRC
22 July 2024
[2024] UKUT 321 (TCC)
Upper Tribunal
Someone tried to appeal a large tax bill three years late. The first court said no because the appeal was too late and the case was weak. The second court agreed, finding the first court acted correctly.
Key Facts
- •Rytis Makvicius applied for permission to appeal a First-tier Tribunal (Tax Chamber) decision refusing his out-of-time appeal against HMRC's assessment of £31,885 duty and £20,725 penalty for concealed tobacco.
- •The FTT found Makvicius' appeal was over three years late, and his explanation for the delay was insufficient.
- •The FTT considered the merits of Makvicius' case to be 'very weak indeed'.
- •Makvicius argued the FTT erred by considering the merits, applied too high a threshold, failed to account for the penalty amounts, and didn't consider exceptional hardship.
- •The Upper Tribunal (UT) judge heard the application remotely.
Legal Principles
Appeals to the UT can only be made on a point of law.
Section 11 of the Tribunals, Courts and Enforcement Act 2007
When considering late appeals, the FTT should follow a three-stage process (from *Denton*): (1) assess the delay; (2) establish the reason; and (3) evaluate all circumstances, balancing reasons for delay and prejudice to both sides.
Martland
In considering late appeals, the FTT can consider obvious strengths or weaknesses, but not a full analysis of the merits.
Martland
The FTT has a wide case management discretion; to overturn this, the applicant must show no reasonable tribunal could have exercised discretion as it did.
Penalties must not exceed what's strictly necessary and cannot be disproportionate to the infringement's gravity to the extent that it obstructs the directive's aims.
Paraskevas Louloudakis v Elliniko Dimosio (Case C-262/99)
Courts should show deference to Parliament's penalty schemes, unless the assessment of necessity lacks reasonable foundation.
HMRC v Trinity Mirror Group PLC [2015] UKUT 0421 (TCC)
Outcomes
Permission to appeal refused.
The UT found Makvicius failed to demonstrate an arguable error of law by the FTT. The FTT's decision was within its case management discretion. Makvicius' grounds of appeal were unarguable.