Preferred Tubes Ltd v Revenue and Customs (CUSTOMS DUTY AND VAT - application for permission to bring a late appeal) [2025] UKFTT 524 (TC) (09 May 2025)

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE]
	First-tier Tribunal (Tax)
You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Preferred Tubes Ltd v Revenue and Customs (CUSTOMS DUTY AND VAT - application for permission to bring a late appeal) [2025] UKFTT 524 (TC) (09 May 2025) URL: https://www.bailii.org/uk/cases/UKFTT/TC/2025/TC09514.html Cite as: [2025] UKFTT 524 (TC)

DECISION

INTRODUCTION

1. This decision deals with an application by the appellant (or "the company") for permission to bring an out of time appeal ("the application") against the decision by HMRC set out in the decision letter dated 7 November 2023 ("the decision letter") in which HMRC decided ("the decision") that the appellant was liable to pay safeguarding duties of £243,599.87 ("the duty") together with import VAT of £48,720.03 arising from the importation of steel products between January and November 2021.

2. The decision was upheld on review on 20 December 2023 ("the review conclusion"). However, it was not until 2 July 2024 that the company appealed to the tribunal.

3. This is outside the 30 day period permitted by the relevant legislation. HMRC oppose the application.

4. For the reasons given later in this decision, we have rejected the application, and the appellant does not have permission to appeal against the decision, or indeed against the review conclusion, out of time.

THE LAW

The duty

5. At the relevant time, the importation of steel was potentially subject to a quota which was limited by weight and which was allocated, for each period, on a first-come first-served basis.

6. The application of the quota and associated safeguarding duty is governed by the Notice of Determination 2020/06 and Taxation Notice 2020/06. These notices have the force of law.

7. The Taxation Notice provides that "an importer, citing the order number for the relevant steel product category, must apply to [HMRC] to access a quota".

8. If no quota order number is cited, then the importation of steel is subject to safeguarding duty at a rate of 25%.

9. If safeguarding duty has been paid, it is possible for the importer to make a claim for a retrospective allocation of quota. As the quota is volume limited and operates on a first-come first-served basis, the success of any such application is dependent upon the quota not having been exhausted by earlier allocations or transferred for use in later periods.

Right of appeal

10. Where HMRC have made a relevant decision and have been requested to undertake a review by the appellant, the appellant has a right to appeal against the relevant decision within 30 days from the date of the review conclusion (see section 16(1C) Finance Act 1994).

11. Under section 16(1F) of that Act, an appeal may be made after the end of that 30 day period if the tribunal gives permission to do so.

The Rules

12. Under Rule 2 of the First-tier Tribunal (Tax Chamber) Rules 2009 (as amended) ("the Rules"):

Overriding objective and parties' obligation to co-operate with the Tribunal

(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.

(2) Dealing with a case fairly and justly includes—

(a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties;

(b) avoiding unnecessary formality and seeking flexibility in the proceedings;

(d) using any special expertise of the Tribunal effectively; and

(e) avoiding delay, so far as compatible with proper consideration of the issues.

(3) The Tribunal must seek to give effect to the overriding objective when it—

(a) exercises any power under these Rules; or

(b) interprets any rule or practice direction.

(4) Parties must—

(a) help the Tribunal to further the overriding objective; and

(b) co-operate with the Tribunal generally.

13. Under Rule 20, proceedings must be started by sending a notice of appeal to the tribunal and under Rule 20(3) "The appellant must provide with a notice of appeal a copy of any written record of any decision appealed against, and any statement of reasons for that decision, that the appellant has or can reasonably obtain".

14. Furthermore, under Rule 20(4), if a notice of appeal is provided after the 30 day time limit, but the relevant legislation provides that an appeal may be made or notified after that time with the permission of the tribunal, then the notice of appeal must include a request for such permission and the reason why the notice of appeal was not provided in time.

Case law

15. When deciding whether to give permission, the tribunal is exercising judicial discretion, and the principles which we should follow when considering that discretion are set out in Martland v HMRC [2018] UKUT 178 (TCC), ("Martland") in which the Upper Tribunal considered an appellant's appeal against the FTT's decision to refuse his application to bring a late appeal against an assessment of excise duty and a penalty. The Upper Tribunal said:

"44. When the FTT is considering applications for permission to appeal out of time, therefore, it must be remembered that the starting point is that permission should not be granted unless the FTT is satisfied on balance that it should be. In considering that question, we consider the FTT can usefully follow the three-stage process set out in Denton:

(1) Establish the length of the delay. If it was very short (which would, in the absence of unusual circumstances, equate to the breach being "neither serious nor significant"), then the FTT "is unlikely to need to spend much time on the second and third stages" - though this should not be taken to mean that applications can be granted for very short delays without even moving on to a consideration of those stages.

(2) The reason (or reasons) why the default occurred should be established.

(3) The FTT can then move onto its evaluation of "all the circumstances of the case". This will involve a balancing exercise which will essentially assess the merits of the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission.

45. That balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected. By approaching matters in this way, it can readily be seen that, to the extent they are relevant in the circumstances of the particular case, all the factors raised in Aberdeen and Data Select will be covered, without the need to refer back explicitly to those cases and attempt to structure the FTT's deliberations artificially by reference to those factors. The FTT's role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist.

46. In doing so, the FTT can have regard to any obvious strength or weakness of the applicant's case; this goes to the question of prejudice - there is obviously much greater prejudice for an applicant to lose the opportunity of putting forward a really strong case than a very weak one. It is important however that this should not descend into a detailed analysis of the underlying merits of the appeal".

16. In HMRC v BMW Shipping Agents [2021] UKUT 91, the Upper Tribunal relevantly said this:

"52. We will approach the third Martland stage by performing, as Martland requires, a balancing exercise. In that balancing exercise, the need for litigation to be conducted efficiently and at proportionate cost and for directions to be complied with must be given particular weight. However, it remains a balancing exercise which invites, among other considerations, a consideration of the nature of the reasons for the breach of direction and the results that would follow if the appeal is, or is not, reinstated".

EVIDENCE AND FACTS

17. We were provided with a substantial bundle of documents. Mr Cardey, who is a director of the appellant and who presented its case, had submitted a witness statement and gave oral evidence on behalf of the appellant. The bundle also included witness statements from three other witnesses of fact provided on behalf of the appellant. These were largely concerned with the health of Mr Cardey's son and were not contested by HMRC. From this evidence we find as follows:

(1) The company imports mild steel tubes and supplies them for manufacturing in the automotive, medical, and furniture sectors (amongst others).

(2) Between January and November 2021, the company received a number of consignments of steel products from EU countries. The commodity code the products were cleared under was subject to safeguarding duty at 25% once quota was exhausted. However, instead of claiming quota, the appellant's agents used a duty override code to clear the goods without paying any safeguarding duty.

(3) The consequence of using a duty override code was that no customs duty was paid on the imported steel.

(4) In a letter dated 4 October 2023, Officer Miah explained to the appellant that (having checked its customs declarations for the relevant period, and having set out the way in which safeguarding duty is imposed as well as the way in which the appellant might be eligible to claim quota) he intended to charge safeguarding duty of the amount set out above and the reasons for it (basically by using a duty override code instead of inserting the relevant quota order number, the declaration was invalid as an application to access the steel quota).

(5) He followed up that letter by issuing the decision letter which confirmed his original view, on 7 November 2023.

(6) In an email to HMRC dated 2 July 2024, Mr Cardey indicated that the amount was reduced to £235,515.93, as evidenced in a letter dated 28 December 2023. We could not find a copy of that letter in our bundle, but nothing turns on this.

(7) The appellant requested a statutory review of the decision and in the review conclusion letter dated 20 December 2023 ("the review conclusion letter") the reviewing officer upheld the decision.

(8) The appellant paid £235,515.93 to HMRC on 17 January 2024. It then made a retrospective claim for steel quota and received £57,330.54 by way of reimbursement (we are not certain when this claim was made, nor the date of reimbursement, but there is evidence suggesting that it was in May 2024). There was insufficient quota available for the relevant period to enable the appellant to make a claim for reimbursement of the entire amount of safeguarding duty.

(9) On 17 January 2024, the appellant also attempted to submit an appeal through the tribunal's online portal. The notice of appeal generated on 17 January 2024 records that a document was uploaded with its appeal papers, but it is accepted that this was not the review conclusion letter. One reason for this is that in a letter dated 26 January 2024 from the tribunal to Mr Cardey, the tribunal indicated that the appellant had not included, with its notice of appeal, a copy of any written record of any decision appealed against.

(10) That letter from the tribunal also explained that the appellant should rectify the error before resubmitting the notice of appeal, and that if this meant that the notice of appeal was submitted outside the original time limit, the appellant must give its grounds for making a late appeal on the Notice of Appeal form. It goes on to say that if the appellant did not "the Tribunal will reject the appeal again". (Emphasis in the original).

(11) The tribunal's letter was emailed to Mr Cardey on 26 January 2024, and then again on 23 April 2024. On that latter date, Mr Cardey resubmitted the original notice of appeal together with a copy of the review conclusion letter but, given that the 30 day time limit had expired, did not provide, in the notice of appeal, grounds for making a late appeal. Indeed, the notice of appeal stated that the appeal was made in time.

(12) On 2 July 2024, Mr Cardey spoke to a member of the tribunal staff over the telephone, and followed up with an email, on that date, to "confirm the reasons [for] the late response...".

(13) In a letter dated 20 August 2024 to Mr Cardey, the tribunal acknowledged receipt of the notice of appeal dated 23 April 2024 and deemed it to have included an application for permission to make a late appeal.

(14) The notice of appeal records four grounds of appeal. Firstly, the CHIEF system was not working properly which was a Brexit transitional issue. Quotas were not accessible on the system and the only way to get clearances through was with a duty override code. Secondly, the quota had been exhausted by the time the appellant made a retrospective claim, and no explanation has been given for this by HMRC. Thirdly, safeguarding duty which is described as a safeguarding measure is damaging the UK steel industry. Finally, given announcements by the Government concerning EU and UK trade deals, which suggested zero tariffs and zero quotas would be introduced, the appellant had no reason to suspect that quotas were in place during the relevant period.

(15) It was Mr Cardey's evidence that: once he had paid the safeguarding duty on 17 January 2024, he relaxed; he took his eye off the ball: he is a businessman not a lawyer, and it was therefore understandable that he failed to upload the correct document with the company's notice of appeal on 17 January 2024: he is responsible for providing full-time care and support to his son who has significant mental health issues, and thus Mr Cardey suffers from regular sleep deprivation: during the first half of 2024, the company was extremely busy as most of its customers had a record year in 2024: the company employed agents to deal with its imports who told them that there was no need to make a quota claim: they were told that it was quicker and easier to use an override code since this would ease the traffic jams around Kent.

DISCUSSION

Submissions

18. In summary Mr Abernethy submitted as follows:

(1) The delay in making a valid appeal (which, even on the most benevolent interpretation of the documents was not until 2 July 2024, which is 164 days late) is serious and significant.

(2) The appellant had been notified by the tribunal that its original attempt to submit an appeal on 17 January 2024, was defective. This was set out in the tribunal's letter of 26 January 2024, which was notified to the appellant on that date, and subsequently on 23 April 2024.

(3) No good reasons have been given why the appellant failed to upload the review conclusion letter with its original appeal to the tribunal.

(4) Mr Cardey's explanation of why he then failed to follow up the tribunal's letter, namely that he took his eye off the ball because the company had paid the safeguarding duty on 17 January 2024, is not a good reason for that failure.

(5) No weight should be attached to the fact that the appellant is a litigant in person.

(6) On merits, the appellant's case is weak. Three of the four grounds set out in the notice of appeal are not within the jurisdiction of the tribunal. The allocation of quota to the relevant periods is irrelevant to the question of the correctness of the appealable decision. There is therefore little prejudice to the appellant in denying permission. On the other hand, there will be prejudice to HMRC in having to divert resources to this appeal which could be better used in dealing with appeals which have been brought on a timely basis.

(7) If we were to allow the application, the litigation will be prolonged at greater cost to HMRC. Time limits set by Parliament should be respected.

19. In summary Mr Cardey submitted:

(1) He is a man of business and is not a lawyer. It is not surprising, therefore, that he did not fully understand which was the correct document that had to be uploaded onto the tribunal's website in order to make a valid appeal.

(2) During the relevant period, i.e. between January 2024 and July 2024, the business was extremely busy. Furthermore, he was suffering from sleep deprivation arising from the constant care and attention required by his son. He asked for leniency arising from this.

(3) Once he had paid the safeguarding duty on 17 January 2024, he had taken his eye off the ball and relaxed. He did not appreciate the finer points of bringing the appeal. This is symptomatic of his unusual personal situation.

Our view

20. At the first stage of the Martland analysis, we need to establish the length of the delay. We agree with Mr Abernethy that the tribunal has adopted a benevolent interpretation towards the date on which it has deemed a valid appeal to have been made by the appellant. But even taking this as 2 July 2024, it was 164 days late. That is serious and significant and requires us to identify the reasons for that delay.

21. These appear to be that: it was unsurprising that the wrong document was uploaded in the first place given that Mr Cardey is not a lawyer; having paid the safeguarding duty on 17 January 2024, he failed to give appropriate attention to the appeal, and this was why he did not respond immediately to the tribunal's letter of 26 January 2024 when first notified on that date, nor when subsequently notified in April 2024; his personal circumstances meant that he was extremely tired and this contributed to his failure to pay full attention to the conduct of the appeal.

22. We now need to consider the third stage of the Martland analysis which is an evaluation all of the circumstances of the case. This involves a balancing exercise, assessing the merits of the reasons given for the delay and the prejudice which will be caused to both parties by granting or refusing permission. In undertaking this balancing exercise, we need to take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected. We should not apportion much weight to the fact that the appellant is a litigant in person, but we can have regard to any obvious strengths or weaknesses of its case.

23. Mr Cardey submits that it is understandable that he did not upload the correct document as he is a man of business rather than a lawyer. However, he is clearly a bright and intelligent man who runs a successful business. The instructions on the tribunal's website regarding the decision which needs to be uploaded when submitting an appeal, are clear. They are not written in technical language, but in plain English, and should have been readily understandable by Mr Cardey. It seems likely that he read them since he attempted to upload a document. His failing was that it was the wrong document. If it had been left like that, then we would have had some sympathy.

24. However, he was notified by the tribunal's letter of 26 January 2024, that he had uploaded the wrong document and that need to be rectified. He was also told that if that was not done within the original 30 day period, a revised notice of appeal would not be valid unless it contained reasons for that at late appeal.

25. It was Mr Cardey's evidence that the reason he did not submit a revised notice of appeal following the tribunal's letter was that having paid the safeguarding duty on 17 January 2024, he then failed to pay sufficient attention to the tribunal process. And furthermore, he was suffering from sleep deprivation as a result of caring for his son. Both are understandable reasons for failing to respond to the tribunal's letter, but their weight at this final evaluation stage is diminished by the fact that the tribunal then sent a further copy of that letter to Mr Cardey on 23 April 2024. This should have alerted him to the fact that he needed to put in a new notice of appeal, yet he did not do that for a further two plus months.

26. We have also considered the obvious strengths and weaknesses of the appellant's case. We agree with Mr Abernethy that there are obvious weaknesses. The jurisdiction of the tribunal is limited to a consideration of whether the decision and the review conclusion were correct. The appellant's contentions that the CHIEF system was malfunctioning and that its agent was advised to use the override code, is wholly irrelevant to the correctness of the decision, and whilst it is something which might conceivably be a matter for a public law challenge by way of judicial review, it is not something within the jurisdiction of the tribunal. The same is true of the grounds of appeal dealing with the purpose of the safeguarding measure to safeguard the British Steel industry, and that it was unfair and unreasonable, given the pronouncements made by the UK and the EU regarding a trade deal, that quotas were retained and relevant to the period under appeal. Finally, the way in which quotas are allocated between periods, which comprises the appellant's second ground of appeal is not something which is relevant to the correctness of the relevant decisions.

27. In light of the foregoing the balance of prejudice weighs in favour of rejecting the application. The seriousness and significance of the delay and the reasons given for it do not outweigh: The principle that time limits imposed by Parliament should be respected; the prejudice which will be caused to HMRC by the diversion of resources and additional cost; the obvious weakness of the appellant's case.

DECISION

28. Accordingly, it is our decision that the application is rejected and the appellant does not have our permission to bring its appeal out of time.

RIGHT TO APPLY FOR PERMISSION TO APPEAL

29. 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: 09^th MAY 2025

First-tier Tribunal (Tax)