First-tier Tribunal (Tax)

Neutral Citation: [2025] UKFTT 459 (TC)

Case Number: TC09496

FIRST-TIER TRIBUNAL

TAX CHAMBER

[By remote video hearing]

 

Appeal reference: TC/2023/09463

TC/2023/09462

 

 

Late appeal

 

 

Heard on: 26 September 2024

Judgment date: 24 April 2025

 

 

Before

 

TRIBUNAL JUDGE

RACHEL MAINWARING-TAYLOR

 

 

 

Between

 

1)      HANNAFORD PPE LIMITED

2)      DARREN JONES

Appellant

and

 

THE COMMISSIONERS FOR HIS MAJESTY'S REVENUE AND CUSTOMS

Respondents

 

Representation:

 

For the Appellant:         Michael Avient of Counsel

 

For the Respondents:    Margaret Nkonde, litigator of HM Revenue and Customs' Solicitor's Office

 

DECISION

Introduction

1.             With the consent of the parties, the form of the hearing was V (video) held on the Microsoft Teams platform. The documents to which I was referred are a main hearing bundle of 227 pages and a separate authorities bundle of 198 pages.

2.              Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings.  As such, the hearing was held in public.

The Application

3.             This was an application for permission to make a late appeal in relation to:

(1)          a personal liability notice dated 20 January 2023 issued to Mr Jones, the second Appellant (the PLN); and

(2)          a VAT penalty (the VAT Penalty) issued to Hannaford PPE Limited (Hannaford), the first appellant. 

HMRC objected to both late appeals.

Permission for late appeals

4.             The proper approach for the Tribunal to take in considering applications for permission to appeal late is set out in William Martland v The Commissioners for HM Revenue and Customs [2018] UKUT 178 (TCC) and has been confirmed in various subsequent cases.

5.             The starting point is a presumption that the statutory time limit applies unless the Tribunal is satisfied that permission should be granted. There is no requirement that the circumstances be exceptional before permission can be granted.

6.             In considering whether permission should be granted, the Tribunal must establish the length of the delay and the reasons for the delay and then evaluate all the circumstances of the case.

Background

7.             HMRC wrote to Hannaford on 17 February 2022 advising it would be undertaking a check of the VAT return for the period 1/22 and requesting information supporting a claim for repayment in that return, which Hannaford provided.

8.             HMRC issued a check conclusion letter on 15 May 2022, which stated that HMRC had concluded that the repayment claim was not for a genuine supply and that a decision letter would follow.

9.             HMRC issued a decision letter dated 16 June 2022 (the Decision Letter), which the Appellants maintain they did not receive.

10.         HMRC issued a penalty decision letter to Hannaford on 24 November 2022, which referred to the previous letters dates 15 May 2022 and 16 June 2022. 

11.         HMRC issued a penalty notice to Hannaford on 8 December 2022.

12.         HMRC issued the PLN to Mr Jones on 20 January 2023.

13.         Mr Jones asked HMRC for a review of the PLN on 20 July 2023, which HMRC rejected, on 2 August 2023, on the basis that the request was out of time.  Mr Jones appealed to the Tribunal on 4 August 2023.

Facts

14.         The events as set out in the background section above were not disputed, with the possible exception of whether or not the Decision Letter was received. Mr Jones gave evidence in his witness statement that it was not received, and his subsequent actions were consistent with this.  HMRC did not present any evidence to the contrary. I find that the Appellants did not receive the Decision Letter.   

Summary of Key Arguments   

15.         The Appellants argued that until they received a copy of the Decision Letter, they could not understand the basis for the assessment or for the penalties. They argued that they were proactive in contacting HMRC to obtain a copy of the letter, that the delay in appealing was entirely the result of HMRC's failure to provide a copy of the letter during a period of five months and that their right of appeal should not be able to be removed by HMRC's failure to provide them with the document they needed in order to consider making an appeal.

16.         HMRC argued that the delay in appealing was significant and the Appellants did not have a good reason for it:

(1)          The Appellants should have been expecting the Decision Letter, based on previous correspondence, and could have chased it up with HMRC sooner. 

(2)          Whilst accepting that they (HMRC) perhaps should have replied to the Appellants' requests for a copy of the Decision Letter, HMRC submitted that this point had been dealt with through a customer services complaint and was not relevant to the matter of the late appeal.

(3)          The subject matter of the Decision Letter is not being appealed, only the VAT Penalty and PLN, both of which were received by the Appellants, and there was no reason why the Appellants should not have appealed them on time.

(4)          If the decision on the VAT itself is accepted then the raising of the penalties cannot be challenged, only the level of penalty, and there was no need to have the Decision Letter to do this.

(5)          In any event, the Decision Letter was sent by post and HMRC are entitled to rely on the presumption of deemed service under s7 Interpretation Act 1978.

(6)          HMRC refuted the Appellants' assertion that they sent several emails to HMRC requesting a copy of the Decision Letter (apart from the two letters HMRC acknowledged receipt of), saying the Appellants had shown no evidence in support of it.

Discussion

Length of Delay

17.         The first consideration of the Martland case is the length of the delay.

18.         The deadline for requesting a review by HMRC of the VAT penalty or appealing to the Tribunal in respect of it was 6 January 2023. The appeal by Hannaford was therefore 211 days late.

19.         The deadline for requesting a review by HMRC of the PLN or appealing to the Tribunal in respect of it was 18 February 2023. The appeal by Mr Jones was therefore 168 days late.

20.         HMRC argued that both delays are 'serious and significant' in the context of a 30 day period.  The Appellants argued that, in the circumstances, since they could not appeal until they had the information contained in the letter of 16 June 2022, the delay might fairly be considered as being the number of days between receipt of that letter on 3 July 2023 and lodging the appeals on 4 August 2023, which, they argued, might be regarded as neither serious nor significant.

21.         Having considered both arguments, I consider that in establishing the length of the delay I must follow the facts.  The time periods run from the dates of the VAT Penalty and the PLN as a matter of law, not from the date on which the copy Decision Letter was received. As such, both delays are significant and full consideration of the other parts of the Martland approach is necessary.

Reason

22.         The reason for the delay was that the Appellants did not have a copy of the Decision Letter.

23.         The Appellants maintain the information in this document was necessary in order to understand the penalties issued subsequently. HMRC maintain that all the information necessary to make an appeal was contained in the VAT Penalty and the PLN (and enclosures) and therefore the lack of the Decision Letter is not a good reason for the late appeal.

24.         The dispute between the parties is not about what the reason is, but rather its sufficiency, consideration of which falls within the third aspect of the Martland approach.

Evaluation of Circumstances

25.         Having listened to all the arguments, I consider that whilst an appeal could have been made without the Decision Letter, that document was relevant to the Appellants' understanding of the situation and the basis for the penalties and any appeal against them. Whilst I acknowledge the application of the statutory provisions around deemed service of the Decision Letter, raised by HMRC as an alternative argument, I do not consider it reasonable to apply this strictly in light of the Appellants' subsequent letters to HMRC stating it had not been received and requesting a copy.  

26.         HMRC sought to minimise or dismiss the Appellants' efforts to obtain a copy of the Decision Letter and I found the way their Notice of Objection was presented (and therefore their submissions, which followed it) gave a rather skewed view of the timeline.  

27.         I consider that the Appellants acted reasonably quickly in requesting the Decision Letter following receipt of the VAT Penalty on 8 December 2022 and in following up the original request. Given the speed with which the Appellants made their appeals following receipt of the Decision Letter, it seems reasonably likely that had they received it sooner, the delay, if any, would have been much shorter.

28.         Based on the specific circumstances of this case and my evaluation of the evidence and arguments before me, I consider that whilst the delay was significant, the Appellants did in fact act reasonably quickly to request information they reasonably needed in order to understand the penalties and consider their right to appeal them. HMRC bears responsibility for a significant portion of the ultimate delay, having ignored at least two requests from the Appellant. The level of the penalties imposed is high and will have a significant economic impact on the Appellants and not to allow them the opportunity to appeal them in all these circumstances would be contrary to the overriding objective of this Tribunal.  

Decision

29.         The application for permission to make a late appeal is granted.     

Right to apply for permission to appeal

30.         This document contains full findings of fact and reasons for the decision.  Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.  The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to "Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)" which accompanies and forms part of this decision notice.

 

 

Release date: 24^th APRIL 2025