P. R. B. Trading Limited v The Commissioners for HMRC

The appellant submitted repayment returns for periods 04/15 to 05/18.

On 4 May 2017, HMRC wrote to the appellant, saying HMRC wished to check its VAT returns. This letter was sent to “P.R.B. Trading Ltd” at Perry Mill Farm, and came from Christopher Glen, VAT Assurance Officer (page 116).

On 1 August 2017, Officer Glen wrote to the appellant to arrange a visit. This letter was sent to “P.R.B Trading Ltd” at Perry Mill Farm (page 119).

On 21 August 2017, Officer Glen wrote again, proposing a visit for 12 September 2017. This letter was sent to “PRB Trading Ltd” at Perry Mill Farm (page 122).

On 8 September 2017, so before the date of the arranged visit, Mr Chesney the appellant’s agent telephoned HMRC and spoke to Officer Glen. The note of that telephone call said (page 125)—

“Phone call received from Mr Stephen Chesney, who identified himself as the agent (this is supported by the VAT1, but there is no 64-8 in place). Mr Chesney advised that Mr Boland will be unavailable on Tuesday as he is currently on the emergency waiting list for an operation. I asked if there was anyone else available to complete the visit with. Mr Chesney advised that he could take the meeting as all the records were held with him anyway.

I accepted this, but advised Mr Chesney that I would need a 64-8 to be completed ahead of the meeting. Mr Chesney confirmed that he would have one for the visit.

Visit now to be held at the agents [sic] premises - Pendragon Business Consultants, 246 Court Oak Road, Harborne, B32 2EJ (this is the same address as the registered office)”.

On 12 September 2017, Officer Glen visited Mr Chesney and did an inspection. Officer Glen took away with him “ALL paperwork up to date of inspection” relating to the appellant. This is seen from Mr Chesney’s email of 29 August 2018 to Mr Boland, supplied by Mr Boland to Sajid Javid’s assistant Danelle Johnston Jones in an email headed “Fwd: VAT Complaint” (page 176).

On 20 October 2017, instead of writing to Mr Chesney, Officer Glen wrote to Mr Boland, requesting further documents (page 127). The letter started with “I write with reference to my ongoing VAT enquiry” (a phrase which also featured in later letters after assessments had already been notified).

By letter dated 24 October 2017, Officer Glen notified assessments for £1,618,282.00, for periods 4/15 to 7/17 (pages 130 to 134). The letter began by saying (page 130)—

“Dear Sir

It was common ground that this 24 October 2017 notification of assessments offered a review (as well as mentioning the right of appeal). That text was on page 130.

On 2 November 2017, Officer Glen wrote to “Mr Patrick Boland PRB Trading Ltd Perry Mill Farm” saying that, having taken further advice, Officer Glen was taking a different course of action (page 135)—

“Dear Mr Boland

I write with regards to my recent assessment dated 20 October 2017 [sic] (Footnote: ¹).

Having taken some further advice, the correct course of action is actually to disallow the input tax on the basis that until you can demonstrate that you have made supplies as you have previously claimed - including providing me with all the evidence I requested in my previous letter - then I cannot be sure that the input tax is an expense appropriate to a taxable supply.

Please find enclosed all of the appropriate paperwork to withdraw my previous assessment and raise the assessment for the input tax. As you will see this reduces the amount due back to HMRC from £1618212 (Footnote: ²).00 to £1517156.00.

As previously discussed, should you provide me with any further evidence, then I will happily consider all paperwork you are able to provide. As discussed with your accountant, I still wish to visit the business at its actual trading address and discuss with you some of the details about the working of the business that your accountant was unable to answer in our meeting. Please contact me to arrange this meeting.

Whichever method you choose to contact us about this check, you need to quote the case reference CFS-1394032 and any other references shown above. If you write you need to use the address shown above. If you send documents you must tell us if you want them returned as we may securely destroy them after 50 days.

Yours sincerely”.

It can be seen that, as well as referring to a replacement assessment, this letter also said Officer Glen “will happily consider all paperwork you are able to provide” if Mr Boland were to provide Officer Glen with any further evidence.

It was common ground that this 2 November 2017 letter did not contain the offer of review (or the reference to appealing) that had been in the assessment notification that was going to be replaced.

On 6 November 2017, a letter headed “Notice of VAT assessments” was sent to Mr Patrick Boland at “PRB Trading Ltd Perry Mill Farm”. It began by referring back to the 2 November 2017 letter. It was common ground that this 6 November 2017 notice did offer a review (and mention the right of appeal) (page 137)—

“Dear Mr Boland

Notice of VAT assessments

I believe that you have not declared or we have not assessed the correct amount of VAT due for the periods shown on the enclosed schedule. I explained this in my letter dated 2 November 2017.

I have made assessments of VAT due under section 73 of the VAT Act 1994. This letter and enclosed schedule is our notice of those assessments.

Summary

As a result of these assessments, the total VAT due is £1,517,156.00.

Default interest

We may charge you default interest. See the section ‘What happens next’, for more information.

What happens next

We will shortly send you a computer generated confirmation of the assessments. This will also show the amount of any default interest charged. Please pay any amount due as soon as you receive the confirmation.

What to do if you disagree

If you disagree with our decision, you need to write to us within 30 days of the date of this notice, telling us why you think our decision was wrong and we will look at it again. If you prefer, we will arrange for a review by an HMRC officer not previously involved in the matter. You will then have the right to appeal to an independent tribunal. Alternatively you can appeal direct to the tribunal within 30 days of this notice. If you choose to appeal to HM Courts and Tribunal Service you’ll need to attach a copy of this letter with your appeal. If you don’t then they may reject your appeal.

You can find more information about appeals and reviews in factsheet HMRC1, ‘HM Revenue & Customs decisions – what to do if you disagree’. You can get this factsheet from our website. Go to www.gov.uk and search ‘what to do if you disagree’ or you can phone our orderline on 0300 200 3610.

You can find out more about tribunals on the Tribunals Service website. Go to www.gov.uk/tax-tribunal

More information

If you have any questions, please contact me using the phone number or address shown at the top of this letter.

I have sent a copy of this letter to your adviser Mr Stephen Chesney.

Whichever method you choose to contact us about this check, you need to quote the case reference CFS-1394032 and any other references shown above. If you write you need to use the address shown above. If you send documents you must tell us if you want them returned as we may securely destroy them after 50 days.

Yours sincerely

Christopher Glen

VAT Assurance Officer”.

On 24 January 2018, Mr Chesney wrote responding to the reference in Officer Glen’s 2 November 2017 letter to providing further evidence and paperwork. This letter from Mr Chesney said it was impossible to get the necessary paperwork and information to HMRC. The letter is undated but it is common ground that it was sent on 24 January 2018 (page 141)—

“Dear Sirs

We again enclose a full set of documents re the above case. This is now the third set we have forwarded to you to no avail.

Please acknowledge receipt.

We sand [sic] ready to provide you with all necessary paperwork / information, but are finding it impossible to get the said information to yourselves.

As you can see the paperwork is far too large to attempt forwarding by Email due to your restricted size Email facilities .

Yours faithfully

S.R. Chesney

For and on behalf of Pendragon Business Consultants Llp”.

Mrs Perrett did not dispute the assertion that it was the third set of documents that Mr Chesney had forwarded to HMRC and I find that it was. As to whether documents had been submitted “to no avail”, I accept that, apart from the 6 November 2017 assessment notice, Mr Chesney had not heard from Officer Glen since receiving Officer Glen’s 2 November 2017 letter.

Included with Mr Chesney’s 24 January 2018 letter was an undated document from Mr Boland (pages 142 and 143)—

“COVERING LETTER

As you can see, hopefully we have tried our best in providing you with information supporting your requests from questions 1-6.

We have approached Drac logistics that we worked with during business with Africa, along with contacting the European companies that we supplied our goods to after Africa. We have obtained some of the documentation that we have requested, showing the goods were received on dates after export.

When working with Africa, we received bills of laden [sic] to confirm and support exportation of stock. You have obtained this information from us.

Drac logistics did the majority of our transport, and have sent us a brief email covering the chief system that they use. This system is to enter the exports on behalf of us, along with confirming that proof of export is the bill of Ladens [sic]. we have not provided you with the original bill of Laden’ [sic], as they go to the customer.

With Europe, most of the companies have responded back and confirmed receipt of the goods with relevance to the invoices.

All of this has been very difficult as you hold all of the documentation on behalf of all the transactions that we have completed over the last 3 years, so we have had to try and sort through this with the hope that customers would work with us on this issue.

Luckily Drac logistics have been very helpful, and provided us with a reasonable amount of documentation. However when you request copy bill of Laden's [sic] from many shipping lines, this can take a while.

We have provided a number of documents, however Drac logistics are awaiting further documentation from certain shipping lines. With reference to this, you do have every bill of laden [sic] with every invoice.

With reference to registering our exports, unfortunately we are beholden on the transport companies for this. We thought that European transport companies because they were exporting on behalf of us would provide the service of registering the exports on the CHIEF system (CUSTOMS HANDLING OF IMPORT AND EXPORT FREIGHT).

With Africa, we have confirmation that the exports have been registered with the chief system on every point of export. And I am very shocked to learn that these have not been registered. Unless you are looking on a different system to what they use (CHIEF SYSTEM).

We have tried to answer all of your questions and to provide you with detailed documentation available within this [sic] time period given.

We have never received a term of contract from Drac logistics; we have only ever received a confirmation of the shipping rates. However you can speak with them directly to confirm the terms of contract.

Drac Logistics: 01785 815655 Points of contact-Andy Hopkins & James Potter.

We hope the information that we have been able to provide will be sufficient, if you need any further documentation please do not hesitate calling or writing to us. This is a matter of urgency for our company and is holding us back.

This along with the amount of VAT owing has created me to have many sleepless nights and extremely worried me.

Regards

Patrick Boland

PRB TRADING LTD”.

I make no findings as to the truth of what is said in that document from Mr Boland, except that I accept that he spoke to Drac Logistics, provided documents to HMRC, and had many sleepless nights and was extremely worried. The accuracy of the rest of the document will be for consideration on the appeal.

On 30 January 2018, Mr Chesney made a telephone call to Officer Glen. Officer Glen’s note of that call said this (page 144)—

“Notes

I accept that Officer Glen said this and I accept that he had received the documents. I need make no finding as to whether it was indeed his intention at the time of that call to work through analysing the documents.

There were then telephone calls on 6 and 14 March 2018 between Mr Chesney and Officer Glen, about the type of information that Officer Glen wanted. I accept Officer Glen’s note of those calls, whose content was not challenged and said (page 145)—

“06/03/18 - Phone call received from agent Mr Chesney, requesting update. I advised that there were several outstanding issues. Mr Chesney asked for meeting to discuss. Agreed 16/03/18 and requested that trader attends.

14/03/18 - Call received from agent, discussed the types of things I wanted to discuss. Agreed that I would send a letter out to summarise the issues that need discussing during the meeting - in an attempt that if legitimate explanations exist then evidence can be provided there and then.

On 14 March 2018, Officer Glen wrote to Mr Chesney at his business address, Pendragon Business Consultants, setting out issues which Officer Glen still wanted explained by evidence. Officer Glen went on to say (page 146)—

“Having examined all of the documentation provided, these kind of issues appear to run throughout all of the stated sales and purchase evidence provided. If you are able to provide evidence to explain the above issues, then this should go a significant way to answering the concerns I have with your client’s business affairs.

As you will no doubt be aware I am also withholding the repayment of VAT returns submitted since I opened my enquiries. In order to speed up the process of verification of the returns for P08/17 to date, please have available the paperwork for these periods”.

On 15 and 19 March 2018, there were two further telephone calls by Mr Chesney to Officer Glen. I accept Officer Glen’s note as to the content of those calls. And I accept that Mr Boland had indeed advised Mr Chesney that Mr Boland would need some time to get some answers together. Among other things, the note shows Officer Glen agreeing that Mr Chesney would need the records to answer some of HMRC’s queries (page 145)—

“15/03/18 - Call received from agent. Mr Chesney advised that he has sent the letter to his client, who has advised that he will need some time to get some answers together. Agreed that agent would need the records to answer some of the queries - agreed a meeting at 13.00 on Tuesday (20/03/18) - where I would return records and the agent would provide records for pre-cred periods.

19/03/18 - Phone call received from agent to advise that he has failed to get hold of the records required (for the recent pre-cred periods). Arranged for alternative date for record collection (and return).”.

On 22 March 2018, at 1.00pm, Mr Chesney or someone from his partnership delivered documents to Officer Glen at his office. I accept the assertion to that effect from Mr Chesney’s note to Mr Boland on page 156; it is so specific that it would be easy to contradict if untrue, and Mrs Perrett did not challenge it for HMRC.

On 5 April 2018, Officer Glen returned records to a Chris Phapps, who collected them on Mr Chesney’s behalf (page 153). Mr Chesney later said, in his 29 August 2018 email (page 176) that only photocopies had been returned to Chris Phapps on that occasion. Nothing turns on whether what Chris Phapps received was only photocopies and I make no finding as to whether he received only photocopies.

Also on 5 April 2018, in the same visit by Chris Phapps, Chris Phapps on behalf of Mr Chesney (page 176)—

“delivered all the recent VAT claims (September 2017 onwards - together with the main letter(again) to Christopher Glenn in Birmingham” (email 29 August 2018).

That Chris Phapps delivered further documents in the 5 April visit is borne out by Officer Glen’s note of that visit on page 153, and I accept that Chris Phapps did so.

I accept from Mr Chesney’s undated note on page 156, that – apart from the return of records on 5 April – between 22 March 2018 when Mr Chesney delivered paperwork to Officer Glen at his office, and 30 May 2018 when Mr Chesney prepared a timeline for Mr Boland (see below), Mr Chesney was able to make contact with HMRC to chase matters, but not with Officer Glen (page 156)—

“we have been unable to remake contact with Mr Glenn who we have been told has moved his position within VAT. Having been told this we asked to speak to his manager to find out who had taken Mr Glenn's caseload and with whom to talk to move forwards. The manager concerned (no name given) was on holiday in Turkey until last Wednesday but would certainly contact us on the day of his return”.

On 9 May 2018, according to a note dated 17 May 2018, Alan Williams, HM Inspector of Taxes sent a letter and enquiry notice in respect of the appellant. According to that note, Mr Chesney telephoned and spoke to Mr Williams (page 154). Neither party referred to these two transactions in this application, so I take it that they are not considered relevant and mention them only for completeness.

Shortly before 30 May 2018, Mr Bolan met with his MP, Sajid Javid (page 155)

On 30 May 2018, Mr Boland’s MP, Sajid Javid, wrote to HMRC’s Chief Executive, Jon Thompson (page 155)—

“Dear Jon

I recently met with my constituent, Patrick Boland, who owns a company called PRB Trading Limited, Ascot House, 246 Court Oak Road, Harborne, Birmingham, England, B32 2EG.

I enclose a sequence of events set out by Mr Boland's accountant listing the problems they have had with HMRC and his VAT.

I am very concerned to read the difficulties he and his accountant have encountered trying to address this matter, and I would be most grateful if you could have Mr Boland's case looked into as a matter of urgency to see what can be considered. I am sure you will appreciate Mr Boland's need to have his repayments reinstated sooner rather than later.

I look forward to hearing from you.

Yours sincerely”.

There is then an undated note from Mr Chesney to Mr Patrick Boland with a timeline which I accept records the position as at 30 May 2018. I say that because, as Mr Watkinson said, the last thing it records is Mr Chesney’s delivery of documents on 22 March 2018, and the note is appended to a letter of 30 May 2018 from Sajid Javid MP to the HMRC chief executive. The note records Mr Chesney’s frustration at attempts to supply records to HMRC (page 156)—

“• At the beginning of December PRB and ourselves tried to contact Christopher Glenn on • 03000 570163 for an update. His phone just clicked to answerphone saying the number was unobtainable. — We tried on over 50 times during the next month and I am aware PRB tried on numerous occasions too.

I make no finding as to the number of telephone calls that Mr Chesney made to Officer Glen’s telephone number from the beginning of December and in “the next month”, or as to whether Mr Boland made any calls to that telephone number in that period. But I accept that Mr Chesney tried several times between the beginning of December and 24 January (when he wrote to Officer Glen). Whether it was 50 times or less than, for example, 10 times makes no difference to my decision.

On 31 May 2018, despite having moved on (according, at least, to what Mr Chesney had been told), Officer Glen wrote to Mr Chesney saying, among other things (page 158)—

“I write with reference to my letter dated 14 March 2018.

As of today I have still not had any response to this letter, and must therefore assume that your client accepts my assessments of 01 [sic] November 2017”.

I find that what the letter said was inaccurate to the extent that it made no reference to the delivery of documents – which I have accepted took place – by Mr Chesney (or someone from his office) to Officer Glen on 22 March 2018 or to the delivery of documents by Chris Phapps on 5 April 2018. That may well be because Officer Glen did not regard that delivery as a response to his letter.

On 12 June 2018, “a ministerial complaint was received” by HMRC (page 82, paragraph 12 (Footnote: ³)).

Officer Glen’s statement went on to say, in the same paragraph, that “In he [sic] team responding to this complaint advised Mr Boland of his right to appeal if he disagreed with the decision”. This response must have gone via the minister and it is unclear whether it was received by Mr Boland before Mr Chesney received Officer Glen’s 14 June 2018 letter which I mention below. In any event, despite that statement by Officer Glen that the team had advised Mr Boland of his right to appeal, Officer Glen wrote to Mr Chesney on 14 June 2018 saying the VAT enquiry was “ongoing”: see subparagraph (32) below.

On 14 June 2018, Officer Glen wrote to Mr Chesney apologising for the delays and saying HMRC are still looking into the details of the repayment claims (page 160)—

“Dear Mr Chesney

PRB Trading Ltd

I write with regards to the ongoing VAT enquiry into your client named above.

I apologise for the delay in getting a response to you, we are currently still looking into the details of the repayment claims made by your client. This matter is being dealt with as a matter of importance and you will be notified as soon as a decision has been reached.

Whichever method you choose to contact us about this check, you need to quote the case reference CFS-1394032 and any other references shown above. If you write you need to use the address shown above. If you send documents you must tell us if you want them returned as we may securely destroy them after 50 days.

Yours sincerely”.

On 27 June 2018, HMRC’s Chief Executive wrote to the MP, Sajid Javid, saying among other things that on 2 November 2017, HMRC had raised assessments “until PRB could evidence the supplies” (page 161).

On 2 July 2018, Sajid Javid wrote to Mr Boland or Mr Chesney (I could not find the letter in evidence, but it seemed to be common ground that he had). Mr Chesney said of this (page 176)—

“Despite the situation with Sajid Javid and his secretary's holiday there was indeed a letter from him dated 2nd July when Through Jon Thompson - Chief Executive of HMRC they appear to be denying all purchases even given their delivery as previous. They also stated they returned the documents at the meeting with Chris ..They did not. It was selected photocopies - they still hold the originals”.

I take this to refer to the 5 April 2018 meeting between Chris Phapps and Officer Glen at the latter’s office building. I have already said above that I make no finding as to whether it was photocopies or originals that were returned to Chris Phapps on that occasion.

In Officer Glen’s unsigned witness statement dated 5 August 2021, he said (page 82)—

“13.

On 3rd July 2018 I wrote to the agent to try to get the information on how payment had been received for the supplies the business was claiming to have made.” (page 82, paragraph 13).

I could not see that letter in evidence and make no finding as to whether that letter was sent. In any event, Officer Glen received further documents from Mr Chesney on 5 July: see subparagraphs (36) and (37) below.

After 2 July and shortly before 5 July 2018, Mr Chesney sent further documents to Officer Glen by recorded delivery (page 176 (Footnote: ⁴)).

On 5 July 2018, that further documentation was received by HMRC, according to Royal Mail’s Track and Trace, which showed it as having been delivered and signed for at 5.01am (page 178).

On 2 August 2018, Mr Boland emailed Danielle Johnston Jones, assistant to MP Sajid Javid, saying (page 179)—

“Hi Danielle,

Following our correspondence some weeks ago regarding your kind offer to forward on my file with the answers to hmrc queries, I am saddened to inform you that I now find it necessary to accept your offer of help on this issue. Unfortunately despite my account [sic] sending the file to hmrc by courier several weeks ago, neither my accountant or I have received any form of correspondence or communication from them. In fact they have not even acknowledged receiving the file. Therefore I am sending you not only that file but also all related paperwork to confirm my explanations. I hope you can ensure that it is forward onto The [sic] chief executive of hmrc. I would very much appreciate it if Sajid could request an explanation for their lack of response whilst hopefully agreeing that this [sic] far below the standards expected of the civil service. I once again find myself indebted to you and Sajid.

P.s PDF to follow

Best Regards

Patrick Boland”.

On 8 August 2018 at 11.45am, Mr Chesney telephoned Officer Glen’s telephone number. Mr Chesney described the call as follows (page 177 (Footnote: ⁵))—

“On the 8th August at 11.45 I rang Christopher Glen's phone on the off chance of speaking to someone who knew where he was ... (Footnote: ⁶)normally the phone is turned off, as I have found on dozens of previous attempts to contact. However a lady answered and informed me that Mr. Glen was walking past the very desk, he spoke to me and informed me he now had the case back and was issuing a conclusion letter which after some prompting (rang three times for copy) we received by email on 14th August. To date we have not received a posted copy. This letter/Email seems to take no cognisance of any documentation forwarded. As we have often repeated we are willing to provide all paperwork again BUT only by specific delivery to Christopher Glenn [sic] and him signing a detailed receipt for it. If you wish to go down that route please let us know” (emphasis in original).

On the same day, 8 August 2018, and apparently in consequence of that telephone call, Officer Glen emailed a colleague within HMRC (page 163)—

“From: Glen, Christopher (ISBC T&SC SWW&WM)

On 10 August 2018, two days after emailing his HMRC colleague saying the case meets the criteria within the sensitive case guidance, Officer Glen wrote to Mr Chesney (page 164)—

“I write with reference to my letter dated 14 March 2018.

As of today I have still not had any response to this letter, and must therefore assume that your client accepts my assessments of 01 [sic] November 2017.

Furthermore, I have now completed the analysis of the VAT repayment claims that have been selected for checking prior to any repayment.

[…]

Given all of this basket of evidence, the only conclusion I can come to is that PRB Trading is not actually under taking [sic] any taxable activity. The evidence provided so far has failed to demonstrate that the business has purchased what it claims, sold what (or to whom) it claims and that it has received the money it claims to have received.

[…]

Therefore without a taxable business, all input tax claims are invalid. Meaning that all input tax claims made by the VAT registration must be denied.

Please find enclosed copies of the official notification of the required corrections that I have sent to your client.

Whichever method you choose to contact us about this check, you need to quote the case reference CFS-1394032 and any other references shown above. If you write you need to use the address shown above. If you send documents you must tell us if you want them returned as we may securely destroy them after 50 days”.

This 10 August 2018 letter did not offer a review (or mention appeal rights). As to whether it was accurate in saying that, as of 10 August 2018, Officer Glen had not had a response to his 14 March 2018 letter, that seems to depend on the view that is taken of subsequent documents and communications sent to HMRC (but it was at least inaccurate in failing to refer to the delivery of documents on 22 March and 5 April 2018).

It also seems that, on 14 June 2018, Officer Glen took the view that he had what he needed, from his letter to Mr Chesney of that date (page 160)—

“I write with regards to the ongoing VAT enquiry into your client named above.

I apologise for the delay in getting a response to you, we are currently still looking into the details of the repayment claims made by your client. This matter is being dealt with as a matter of importance and you will be notified as soon as a decision has been reached”.

I find that the 10 August 2018 letter was inaccurate to the extent that it contradicted the implication in the 14 June 2018 letter that Officer Glen had what he needed.

In a later unsigned witness statement dated 5 August 2021, Officer Glen said (page 83)—

“14.

On the 10^th August 2018 I raised further VAT assessments to reduce the input tax to nil for the further VAT returns received, because there was still no evidence of a bona fide business. This letter contained details of his right to appeal within 30 days”.

That last sentence was not true, as became common ground at the hearing. The letter contained no details of his right to appeal (nor an offer of review).

By six letters dated 13 August 2018, HMRC notified six assessments covering periods 08/17 to 11/17 and 01/18 (pages 98 to 109). I have reproduced text from the first of them below. Each of the other five had the same text as the first, but for different VAT periods and with different amounts. By quoting the assessments, I am not of course making a finding that they are accurate or justified; that will be a matter for the substantive appeal—

“Change to amount claimed on VAT return

We have looked at the amounts declared on your VAT return for the period 08/17.

As a result of our checks we believe that there are inaccuracies in this return, which means that the amount of VAT claimed for the period 1 August 2017 to 31 August 2017 is incorrect. I explained this in more detail in my letter dated 10 August 2018.

The table below shows which boxes of your return contain these inaccuracies. It also shows the amounts that you have declared as well as the adjusted amounts that your return would have shown if it had not contained these inaccuracies. This decision is based only on the checks we have made.

[…]

What to do if you disagree

If you disagree with our decision, you need to write to us within 30 days of the date of this letter, telling us why you think our decision was wrong and we will look at it again. If you prefer, we will arrange for a review by an HMRC officer not previously involved in the case. You will then have the right to appeal to an independent tribunal. Alternatively you can appeal direct to the tribunal within 30 days of this notice. If you choose to appeal to HM Courts and Tribunal Service you’ll need to attach a copy of this letter with your appeal. If you don’t then they may reject your appeal.” (emphasis in original).

So all six notification letters dated 13 August 2018 contained the paragraph headed “What to do if you disagree”, which offered a review. It was common ground that it was these six letters, and not that of 10 August 2018, that were the notices of assessments for the periods covered by those letters (Footnote: ⁸).

On 14 August 2018, Officer Glen wrote to the appellant. He said in the first part of the letter (page 172)—

“Dear Sir

On 14 August 2018, HMRC notified an assessment for the period 12/17. It was common ground that it was this letter, and not that of 10 August 2018, which was the notice of assessments for the period mentioned in the 14 August 2018 letter (Footnote: ⁹).

On 29 August 2018, Mr Chesney emailed to Mr Boland “a timeline for the debacle with Christopher Glenn [sic]”. In the final paragraph, Mr Chesney said (page 176)—

“HMRC wrote to us on 14th June saying they were still reviewing, but did not state who was doing the review”.

On 6 September 2018 at 00.49, Mr Boland emailed Danielle Johnston Jones at Mr Boland’s MP’s office, recording despair at Officer Glen’s actions and the “saga with HMRC”, and saying that that “this has impacted on my mental and physical health” (page 175)—

“Hi Danielle,

I am going to forward on to you an e mail from my accountant Mr Steven Chesney, this e mail shows the ludicrous response from Christopher Glenn [sic] to the saga with HMRC. My accountant can clearly demonstrate that the claim by Mr Glenn [sic] that he has received no correspondence from us in the last six months is completely wrong.

I now formally request that Sajid Javid sends my previous email containing answers and evidence that I had previously sent to you, to the chief executive of HMRC Mr Thompson without delay along with the email form my accountant. I am now facing the threat of a winding up order on my company, I truly despair at the unfair and even vindictive actions by Mr Glenn [sic]. I feel only Sajid can help me on this issue and spare myself and family any further stress. I cant [sic] begin to tell you how this has impacted on my mental and physical health.

I have been a servant of my queen and crown only to be treated in the most unreasonable way. I plead with sajid [sic] to help in any way he can”.

A few minutes later on the same day, 6 September 2018, Mr Boland emailed to the same person, Danielle Johnston Jones, the timeline email that Mr Chesney had sent to Mr Boland on 29 August 2018 (page 176).

On 7 September 2018, Sajid Javid MP wrote to HMRC’s Chief Executive Mr Jon Thompson enclosing Mr Chesney’s email of 29 August 2018 to Mr Boland, and asking Mr Thompson “to review Mr Boland’s case with some urgency” (page 174).

On 13 September 2018, a further complaint was according to HMRC’s timeline made for the appellant. But the page number for that in the bundle index – page 174 – led to the complaint dated 7 September 2018 by Mr Javid. So I take it that there was no additional complaint by him just six days after that.

On 28 September 2018, HMRC’s Chief Executive wrote again to the MP, Sajid Javid. The Chief Executive explained that Officer Glen disconnects his number from the telephone system when out of the office. The letter set out the current position as the Chief Executive saw it (page 184)—

“On 10 August 2018, we wrote to the agent telling them that PRB had not made any taxable supplies and is not entitled to the VAT claimed on their tax returns.

In our letters about our assessments and reduced VAT repayment claims, we told PRB what they can do if they disagree with our decision. Mr Boland can find more information about the appeals process at www.gov.uk/tax-appeals”.

The second of those two paragraphs was accurate in that some of the letters had told the appellant what it could do if it disagreed with HMRC’s decision. But the 10 August 2018 letter had not said that. It was common ground by the time of the hearing that neither the 2 November 2017 letter nor the 10 August 2018 letter had informed the appellant of how to appeal (or offered a review).

On 12 October 2018, Mr Chesney applied for the appellant to take part in Alternative Dispute Resolution for all of the assessments, that is, the one notified in November 2017 and those notified on 13 and 14 August 2018 (page 186).

On 19 October 2018, HMRC rejected the ADR application because there was no appeal pending (page 188).

On 23 October 2018, according to HMRC’s chronology on page 67, Mr Chesney telephoned HMRC Debt Management asking for collection to be suspended because a formal complaint was in place. Debt Management advised him to appeal. I was not taken to a note of this call and could not find one in the bundle. But the assertion in the chronology was not challenged and I accept that the call took place and that it included the content recorded in the chronology on page 67.

Also on 23 October 2018, after that telephone call, Mr Chesney sent an email to the person he had been talking to – Ami – in Debt Management, containing a document which Mr Chesney referred to in that email as “the complaint” (page 189). HMRC made the point in their chronology on page 67 that “This was a copy of the rejected ADR application”. I accept that, while it was not in the exact format seen in the actual ADR application on page 186, the content of the 23 October 2018 email looked similar to the ADR application.

On 24 October 2018, HMRC’s Debt Management telephoned Mr Chesney “and advised that the complaint was about the conduct of the officer not the debt. He was told to appeal to the tax tribunal”. I was not taken to a note of this call either (and again could not find one in the bundle). But the assertion in the chronology was not challenged and I accept that this call took place and that it included the content recorded in the chronology on page 67.

On 24 October 2018, HMRC notified the appellant of an intention to charge a penalty in the sum of £1,629,658.09 (page 191). The notification said (pages 194 and 195)—

“Penalty schedule 1

Inaccuracy penalty charged under Schedule 24 Finance Act 2007

Type of tax, duty or levy: - VAT

Description of the: - Inaccuracy

You have fraudulently claimed VAT repayments for a non-existent business.

[…]

We consider that the behaviour was deliberate and concealed. This is explained below.

You have produced false invoices to support the fraudulent claim to input tax. This must be seen as an attempt to conceal your fraudulent behaviour. Given that you would have been aware that there was no business, you must have been aware of the errors. Therefore the behaviour behind this error must be seen as deliberate and concealed.

The disclosure was Prompted because you didn't tell us about the Inaccuracy before you'd reason to believe that we'd found out about it, or were about to find out about it.

For this deliberate and concealed Inaccuracy with a prompted disclosure, the minimum penalty percentage is 50% and the maximum penalty percentage is 100%.

This means that the penalty range is from 50% to 100%” (emphasis in original).

On 30 October 2018, according to the chronology on page 67, the respondents began proceedings in the High Court to recover the debt. A petition was served on the company.

On 12 November 2018, HMRC made a final amendment to the VAT return, assessing the period 02/18 (page 215).

The assessments of 13 and 14 August and 12 November 2018, together with the assessment of November 2017 (whether 2 or 6 November), cover periods 04/15 to 02/18 with no gaps.

On 13 November 2018, Mr Chesney telephoned HMRC’s Debt Management. He was advised in that call to take the matter to the tax tribunal (HMRC’s chronology, page 67). I make no finding as to whether he asked what action he should take, as the chronology asserts.

On 14 November 2018, Mr Chesney filed with the tribunal on the appellant’s behalf a Notice of Appeal. It is undated but it is common ground that it was submitted on 14 November 2018 (page 205). In answer to “What is your dispute about?”, Mr Chesney had chosen “HMRC claim you owe money” (page 205). Under “What is the amount of tax?”, Mr Chesney had entered “£1502427.50” (page 205). As to whether the appeal was in time, Mr Chesney said in the notice, “I am not sure”. Mr Chesney went on to give the following grounds of appeal in the notice (pages 205 and 206)—

“Grounds for appeal

I make no finding as to how many calls Officer Glen failed to return, nor as to the length of time, or the periods, for which his telephone was switched off, though I accept that it was switched off on a significant number of occasions when Mr Chesney tried calling. I accept that Mr Chesney felt that all trust and communication with Officer Glen had broken down. I of course make no findings, either, as to the merits of the appeal.

In the part of the Notice of Appeal headed “Representative details”, Mr Chesney had entered (page 206)—

“Steve Chesney

Pendragon Business Consultants LLP

69 Upton Close

Barnwood

Gloucester, GL4 3EX

United Kingdom

Tel: 01452862821

Email: StephenChesney@AOLCom

The representative is an accountant”.

Also on 14 November 2018, “[the] Letter (NPPS100) of 24 October sent to the Appellant’s PPOB was returned by the Post Office7” according to HMRC’s chronology on page 67.

On 26 November 2018, HMRC issued a penalty notice (page 112), further to the letter dated 24 October 2018 advising of their intention to charge the penalty.

On 28 November 2018, the First-tier Tribunal wrote not to Mr Chesney who had filed the appeal and was noted as the representative in the Notice of Appeal, but to Mr Boland, asking for the original decision notice (page 258)—

“Without further information we are unable to register and process your appeal. If you wish to continue your appeal please provide additional documents or information as detailed above.

I have also added a T239 "authorise your representative" form. …”.

It is common ground that this tribunal letter was sent to the appellant’s registered office address. It was not common ground that neither Mr Boland nor Mr Chesney saw the letter (Mr Chesney is recorded as saying so in an internal HMRC email of 25 June 2019, see below). I accept that Mr Boland, the appellant’s director, was in poor health at the time and was also dealing with the consequences of a failed property purchase which meant that he and his family had urgently to relocate. The combination of Mr Boland’s ill health, the family’s relocation and the fact that he had entrusted the appeal to his accountant meant – I accept – that Mr Boland did not for some time visit the appellant’s registered office, where the letter had been sent. That he did not visit it for some time is borne out by the returned mail (subparagraph (66) above) and by what Officer Glen said in his 30 November 2018 letter (page 218): see next subparagraph below. The date on which the appellant or Mr Chesney finally became aware of the tribunal’s 28 November 2018 letter is immaterial, in light of my other findings.

Also on 28 November 2018, according to the respondent’s chronology, the petition was considered at a High Court hearing, HMRC asked for dismissal without consideration of the merits, and the case was dismissed with no costs pending the outcome of the appeal to the tribunal (page 67).

On 30 November 2018, Officer Glen wrote to Mr Boland, PRB Trading Ltd, but at a different address from Perry Mill Farm (page 218)—

“Dear Mr Boland

I write to you with regards to the ongoing VAT enquiry into P.R.B Trading Ltd.

In the last month there has been some correspondence sent to your principal place of business that has been returned, the reason given to HMRC for this is that the business is no longer trading from there.

Therefore I am writing to the last known personal address for you, to ensure that you receive copies of all of the correspondence.

The letters you will find enclosed are dated 24 October 2018, 12 November 2018 and 26 November 2018.

Please ensure that the address for any correspondence to the business is updated on the VAT system and any other appropriate HMRC systems you may use …”.

On 25 January 2019, the tribunal wrote to Pendragon Consultants saying the appeal had been closed because the tribunal had not received further correspondence. The letter was not in evidence, but it was common ground that that was what it had said. It was also common ground that there had been no unless order and no formal striking out of the appeal, and that this January 2019 letter was the only communication purporting to end the appeal.

By a second petition, dated 16 April 2019, HMRC petitioned the High Court for the winding-up of the company (pages 243 to 249). This was served on the appellant on 28 May 2019 according to the chronology on page 67.

On 12 June 2019, the first hearing took place in the winding-up proceedings. A note by Jack Quinlan of HMRC to his colleague Mrs Perrett (email 10 August 2021) described it thus (emphasis in original, page 241)—

“First Hearing 12/06/2019

I have used HMRC’s own descriptions of the High Court hearings, taken from Jack Quinlan’s note at pages 241 and 242, for the relevance of those descriptions to whether HMRC were aware that there was a tribunal appeal having been made and going to be made.

On Tuesday 25 June 2019 at 10.36, Norman Draper of HMRC emailed his colleague Lisa Lester of HMRC (page 221)—

“Subject: A phone call for one of Chris Glen's old cases

Morning Lisa,

One of my team took a phone call from a Steve Chesney, Pendragon Business Consultants, the agent for PRB Trading Ltd. CFS-1394032.

He has been trying to contact Chris Glen and his phone disconnects.

Its regarding a winding up process and the judge has adjourned the case for 4 weeks for his client to resolve.

The agent needs to speak to someone from HMRC to discuss and has been unable to do so.

Can you take this forward?

Regards”.

On the same day, 25 June 2019 at 11.03, Lisa Lester of HMRC emailed her colleague Jasprit Gandhi (page 220)—

“Subject: FW: A phone call for one of Chris Glen's old cases

Hi Jas,

As discussed, can you give Steve Chesney a call please – their number is 427-1114.

Thanks.

Lisa”.

Later the same day, 25 June 2019 at 15.54, Jasprit Gandhi emailed her colleague Officer Glen (page 220)—

"Gandhi, Jasprit (ISBC T&SC SWW&WM)" <jasprit.gandhi@hmrc.gov.uk>

Three days later, on Friday 28 June 2019, there were at least three telephone calls between Officer Glen and Mr Chesney. Officer’s Glen’s note of the calls was as follows (page 222)—

“Note of telephone calls

From Chris Glen to Mr Chesney

13:24 28/06/2019 – Phone call made to 01452 862 821. No answer

13:30 28/06/2019 – Phone call made to 07727 553 720. Spoke to Mr Steve Chesney (agt). Mr Chesney advised that the judge had ordered him to speak to me to sort the issues with regards to the VAT assessments out. I asked Mr Chesney if his client disagreed with the VAT assessment. Mr Chesney advised that he did. I asked why he had not appealed against the assessment. Mr Chesney stated that the case had gone to a First Tier [sic] Tribunal in 2018 but he had not been notified of this. I asked Mr Chesney why his client had failed to provide any response to the numerous queries posed to him over the course of my enquiry. At this point the phone went dead.

13:38 28/06/2019 – Phone call made to 07727 553 720. Mr Chesney answered and apologised for phone cutting out. He stated he was unsure if it was my phone or his. I asked Mr Chesney if he had received my letter dated 10 August 2018. He advised that he had but did not have it to hand. I advised that in this letter was listed all of the reasons for my assessment and no response has been received. Mr Chesney asked that I call him next week to discuss this further. I agreed a time of 14:00 on 01/07/19 for phone call”.

As to the record of the second of those calls, I make no finding as to whether Mr Chesney did or did not say that “he had not been notified of this” or as to what he meant by that if he did say it. I make no finding either as to when the telephone went dead.

On 3 July 2019, Mr Chesney emailed to Officer Glen a letter dated 3 July 2019, which said (pages 236 and 237)—

“Dear Mr Glen

On 5 July 2019, Officer Glen wrote to Mr Chesney. In his letter, Officer Glen asked for further evidence to suggest that his conclusion was incorrect, and recorded that ADR had been refused because HMRC had never received any appeal against Officer Glen’s decision (pages 238 and 239)—

“The answers provided to my letter of 14 March 2018 (which I must note that the first time you have given me these answers is 03 July 2019) are incomplete – with questions 5, 6 7, and 9 all being ignored. The partial response provided is not supported by any kind of evidence. It would be reasonable to expect that there would be some sort of audit trail if the person the goods are being delivered to is different to the one being invoiced. The answers provided actually raise more questions, for example the response to Question 10 suggests that there was actually more purchased from John Sharpe than the records originally suggest, calling into doubt once again the purchase records.

For me to begin the process of reconsidering my decision I need some sort of evidence that suggests my conclusion is incorrect.

[…]

In HMRC’s letter of 19 October 2018 you were advised that Alternative Dispute Resolution was not appropriate because you had not appealed the decision. This remains the case – HMRC has never received any appeal to my decision. If you consider that your client now wishes to appeal my decision you will need to consider the fact sheet HMRC Decisions – What to do if you disagree. You can find this at www.gov.uk and search ‘HMRC1’ or get a copy by phoning our orderline on 0300 200 3700. As well as notifying me of the reasons why you are appealing, I will need to consider if I will accept such a late appeal. So, if you do decide you wish to appeal then please provide me with an explanation of why it has taken such a long time from the original decision (and numerous subsequent letters) to submit the appeal” (emphasis in original).

I make no finding as to whether the views Officer Glen expressed in that 5 July 2019 letter were accurate.

On 30 July 2019, the appellant instructed ASW Legal Limited T/A ASW Solicitors (page 251) (Footnote: ¹¹).

On 31 July 2019, the third hearing took place in the winding-up proceedings. The note by Jack Quinlan of HMRC recorded that (page 241, emphasis in original)—

“Third Hearing 31/07/2019

On 28 August 2019, Matthew Whyatt of ASW Solicitors (“ASW”) made his first witness statement in the winding-up proceedings (page 250)—

“Background

Also on 28 August 2019, the fourth hearing was held in the winding-up proceedings. The note by Jack Quinlan of HMRC described it thus (page 241)—

“Fourth Hearing 28/08/2019

• Sought UCO as we had no contact or payment from company nor was there a request for appeal or FTT submission.

• Company granted Adjournment for HMRC to take a look into companies [sic] witness statement” (document sent to his colleague Mrs Perrett on 10 August 2021).

On 4 September 2019, the appellant’s new representative, ASW, emailed the appellant’s previous representative, Mr Chesney. ASW asked him, among other things: for information about the appeal that he had made to the tribunal in November 2018, whether he had responded to the tribunal’s request for further information and for HMRC’s final decision letter. The email asked Mr Chesney to respond as a matter of urgency (pages 279 and 280).

On 9 September 2019 at 11.38, Jessica Whyatt of ASW emailed Officer Glen, saying, among other things (page 274)—

“We understand from Mr Mann that you have experienced difficulty in sending the documents requested by him in his letter dated 20 August 2019 to him [sic]. We are surprised that you have experienced any such problems, as we assume that HMRC are often asked to provide large quantities of documents. In any event, the documents are to be sent to the following address without delay:-

ASW Solicitors

Unit 27 Hub Squared

3a Bridgewater Street

Liverpool

LlOAR

We frequently receive large batches of documentation via an on line file transfer platform called 'We Transfer'. This is a secure way of sending documentation by way of electronic file transfer. If there is to be any sort of delay in posting the documentation to this firm, then please provide the same by way of electronic transfer as a matter of urgency”.

On 11 September 2019 at 09.49, Officer Glen replied by email saying (page 273)—

“Dear Ms Whyatt,

Thank you very much for your email.

I will get the required paperwork sent to your offices immediately.

Before I can do that, however, I must ask that you send the 64-8 in another file format please. I have been unable to open the file in the format that you have sent it, so I have been unable to verify the appropriate completion.

Regards,

Chris Glen”.

On 11 September 2019 at 11.21, Jessica Whyatt of ASW replied by email to Officer Glen, enclosing the 64-8 form in PDF format (page 272).

On 11 September 2019 at 11.23, Officer Glen replied by email saying (page 272)—

“Thank you Ms Whyatt.

That format has worked.

I will get the letter in the post to you now”.

On 17 September 2019 at 13.11, Jessica Whyatt of ASW emailed Officer Glen referring to the email chain that had ended with Officer Glen’s email of 11 September 2019 at 11.23. Jessica Whyatt was chasing the promised letter (page 271)—

“Dear Mr Glen,

I refer to the below email exchange.

Please confirm whether the letter and enclosures have been sent and, if so, please provide any tracking information by return.

As I have explained previously, our Client requires the requested information/ documentation as a matter of urgency and so I would be grateful if you could confirm the above by return.

We look forward to hearing from you.

Yours sincerely,

ASW SOLICITORS

Jessica Whyatt”.

By a letter dated 11 September 2019, but not received by ASW until after 17 September 2019 (see immediately preceding subparagraph above), Officer Glen wrote to the new representative, ASW, enclosing all correspondence relating to the enquiry into this appellant. The final paragraph mentioned the possibility of a late appeal (page 277)—

“Should your client wish to make a late appeal then your client must explain why the appeal is being made outside of the 30 day appeal window from the date of the assessment. Alternatively, he can appeal to the tribunal directly.”.

On 24 September 2019, Matthew Whyatt of ASW made his second witness statement in the winding-up proceedings. Paragraphs 8 to 15 chronicle Mr Whyatt’s attempt to contact Mr Chesney (page 267)—

“8.

As I explained previously in Paragraphs 9-11 of my First Witness Statement, the Company had instructed its accountant, Mr Steve Chesney of Pendragon Business Consultants LLP, 69 Upton Close, Barnwood, Gloucester, GL4 3EX ("the Accountant"), to lodge an appeal of the VAT assessments on its behalf. Regrettably, the Company and/ or ASW are still not in a position whereby it can explain to the Court what became of the Appeal that was lodged by the Accountant on or around 14 November 2018 as the Accountant has still not provided the information and/ or documentation requested by the Company and, more recently, by ASW.

9.An email was sent to the Accountant by ASW on or around 4 September 2019 asking for the documentation to be provided without delay [MW2/10-11]. ASW expressed the urgency of this request and explained that there was an adjourned winding up petition hearing due to take place 28 days from the date of the previous hearing and, in light of this, asked for the documentation relating to the Company, and specifically to the Appeal, to be provided by no later than 5 September 2019.

On 25 September 2019, the fifth hearing in the winding-up proceedings was held. The note by Jack Quinlan of HMRC to his colleague Mrs Perrett described it thus (page 241)—

“• Sought UCO as we had no contact from company or any reduction to the debt. Strongly oppose any adjournment request. The witness statement and application to the tribunal that were filed in November 2018 were rejected by the tribunal in January 2019 as company failed to provide information requested by the tribunal service. Our demand letter for this petition was issued after the tribunal rejection.

• Company granted adjournment to file another appeal”.

On 27 September 2019, Jessica Whyatt of ASW emailed the tribunal. She enclosed a Form 64-8 and told the tribunal that ASW intended to contact the tribunal that day to discuss the appeal (page 285).

On 3 October 2019, the tribunal replied (page 285)—

“Thank you for your email.

On 21 October 2019, Matthew Whyatt of ASW made his third witness statement in the winding-up proceedings, in relation to an adjournment request. The witness statement mentioned Mr Boland’s health, recorded attempts to extract further information from Mr Chesney and recorded that ASW had discovered from the tribunal that the appeal lodged in November 2018 had been closed (page 281)—

Since the previous hearing, we have had great difficulty in taking instructions from our Client. Patrick Boland ("Mr Boland"), the Director of the Company, has been suffering from ill health and, in light of this, has been unable to contact this firm in order to provide instructions, despite this firm contacting Mr Boland by way of email on a number of occasions seeking the same.

ASW was able to take instructions from Mr Boland on Friday 18 October 2019. Mr Boland explained that he has had technical difficulties with his phone which has prevented him from being able to contact this firm. He also explained that, also due to these technical difficulties, he has not received any of our emails since around 25 September 2019. We have now provided Mr Boland with copies of any and all emails that have been sent to him by ASW since the Previous Hearing and Mr Boland has provided full instructions on how ASW is to proceed.

Mr Boland suffers from ill health generally and has recently experienced difficult personal circumstances which have caused him to, in his words, put his head in the sand as he could not deal with the stress of everything happening at once. Mrs Whyatt has since spoken with Mr Boland, has explained the steps that will need to be taken in order to lodge the Appeal, and has advised of the importance of doing all that he can to progress this matter moving forward. Mr Boland accepts that his conduct has not been conducive to progressing the matter as quickly as maybe would have been possible and understands that he must now provide instructions expeditiously in order to progress the matter moving forward.

[…]

In order to determine what became of the previously lodged Appeal, Mrs Whyatt contacted the Tribunal, providing them with a form of authority to speak on behalf of the Company, and asked for the Tribunal to confirm the outcome of the previously lodged appeal. This email was sent on 27 September 2019, following the previous hearing [MW3/X2}.

A response was received from the Tribunal on 3 October 2019 explaining that the previously lodged appeal had been closed on the Tribunal's system as no response was received from the Company's agent, the Accountant [MW3/1]. The Debtor intends to raise a complaint with the Accountant's firm and, should it become necessary, will seek legal advice in respect of the apparent negligent actions of the Accountant in failing to respond to the queries of the Tribunal.”.

On 23 October 2019, the sixth hearing was held in the winding-up proceedings. The note by Jack Quinlan of HMRC to his colleague Mrs Perrett described it thus (page 242)—

“• The company asked for address to serve another W/S. The tribunal service who confirmed there was an appeal in 2018 and they wrote to company in November 2018 asking for more information but had no response so they closed case in January 2019 and confirmed there had been no further appeals with them. A 64-8 was sent to the tribunal service authorising a Jessica Wyatt but this is not a form the tribunal use. The tribunal also confirmed that an appeal must be made in 30 days of a decision and that the company were outside of that time with the appeal in 2018.

• Sought UCO at hearing

• Company granted adjournment to see if they will file their appeal as the claim they would on 28/10/2019”.

On 29 October 2019, the appellant’s new representative, ASW, filed with the tribunal a new notice of appeal and an application to appeal out of time (pages 10 to 33). In the box headed “The amount HMRC claim I owe”, the amount entered was £1,517,156.00 (page 15), which was the amount only of the first assessment. But it was not suggested for HMRC that the appellant’s intention was not to appeal against all of the input tax assessments.

On 9 December 2019, the tribunal wrote to HMRC requesting a decision on hardship and enquiring as to HMRC’s position on the late appeal (page 310).

On 9 December 2019, the tribunal wrote to Jessica Whyatt, Litigation Manager at ASW, acknowledging receipt of the Notice of Appeal “dated 30 October 2019” (nothing turns on this difference of one day). The letter also said that the tribunal had asked HMRC whether they object to the hardship application and that the tribunal would write to Ms Whyatt again when the tribunal had heard from HMRC (page 309).

On 23 January 2020, ASW applied to the tribunal on the appellant’s behalf for an unless order. They said they had not heard from HMRC on the late appeal or hardship, noted Mr Boland’s worsening health condition and enclosed a GP letter dated 2 January 2020 (page 318) which confirmed that Mr Boland had recently had a heart attack, has coronary artery disease and is an insulin dependent diabetic. I am setting out the cover email in full because, although it post-dates the latest date on which I find an appeal was made (the penalty appeal made on 29 October 2019), it is relevant when it comes to considering all of the circumstances. The email said (page 316)—

“We refer to the above.

On 29 January 2020, the second winding-up petition was dismissed, without costs. The parties each give a different reason for this (pages 77 and 242) (Footnote: ¹³).

On 5 February 2020, the appellant’s hardship application was accepted.

On 13 March 2020, the respondents filed with the tribunal their Notice of Objection to the application to make a late appeal (page 36).

On 31 March 2021, Mr Boland’s GP Dr Arora wrote to whom it may concern (page 315)—

“Dear Sir/Madam,

On 21 June 2021, Matthew Whyatt of ASW made a witness statement in these tribunal proceedings (page 76). He explained some of the history and described Mr Boland’s own ill health and the progression which had precluded a previously planned operation, Mr Boland’s long-term partner’s cancer diagnosis, the death of a close friend, the death of a close family member, and the attempted suicide of Mr Boland’s son (pages 77 and 78)—

I refer to my Third Witness Statement from the Winding Up Proceedings [MW1/39-42] and specifically to Paragraphs 6-8 [MW1/39-40] wherein I explained that the Director of the Appellant, Mr Patrick Boland (Mr Boland) had been suffering from the effects of ill health and that this had prevented him from providing instructions to this firm in a timely manner, at that time. My Third Witness Statement, and correspondence generally, was served by way of email on numerous people and /or teams within HMRC’s organisation, as can be seen from the correspondence exhibited to this Witness Statement at pages MW1/45-70.

The Appellant was successful in having the Winding Up Petition dismissed as a direct result of the inaction of HMRC.

An application to Appeal out of time was issued by the Appellant on 29 October 2019 by way of email. The Tribunal acknowledged receipt of the same on 9 December 2019 and the Respondent filed its Notice of Objection five months after the Application was made, on or around 13 March 2020, despite having been served with the Application by way of email on 29 October 2019.

[…]

We are instructed that over the last 12 months, Mr Boland’s son has attempted suicide as a direct result of being informed that Mr Boland’s life expectancy has decreased significantly as a direct result of his numerous illnesses. Mr Boland lost a very close friend as well as a close family member to Covid-19 during the pandemic which caused him and his family a great deal of upset at an already difficult time, which had a detrimental effect on Mr Boland’s mental health and wellbeing generally. Mr Boland’s treatments for his numerous health conditions were delayed due to the Covid-19 pandemic and he suffered a mild heart attack during this time. He had been awaiting a date for triple heart bypass surgery, which he was told would give him a much longer life expectancy; however, his conditions have worsened to the point whereby he is no longer being considered for surgery as it is not believed that he will survive the same. As a result of this, Mr Boland has been informed that his life expectancy has reduced significantly, with his doctor confirming to Mr Boland that if he managed to survive for five years, then that would be the best-case scenario for him.

During our most recent contact with Mr Boland, we were informed that his long-term partner has been diagnosed with cancer and that she is undergoing immediate and intensive treatment for the same which has added yet more pressure to Mr Boland and is therefore worsening his overall condition. Whenever we do manage to speak with Mr Boland, he is noticeably distressed and upset, and so taking instructions is extremely difficult.”.

I make no finding as to the reason the winding-up petition was dismissed.

On 10 August 2021, Jack Quinlan, an internal HMRC colleague of Mrs Perrett (who represented HMRC at the hearing before me), emailed to Mrs Perrett a case history “taken from our system” (page 240). The history seemed a combination of events in and relating to the High Court proceedings and to the tribunal. The first entry said, of a High Court hearing (page 241)—

“Hearing in 2018

• We were instructed to dismiss the case on first hearing to allow the appeal submission to be reviewed by tribunal.”.

On 15 February 2022, Mr Patrick Boland’s GP Dr Arora wrote to ASW (page 319)—

“Thank you for your email. I have been the GP of this patient for some considerable time and know of his conditions very well.

He suffers from Coronary Artery disease (presently angina also) which has been thoroughly investigated and is finding difficulty in having surgery. I understand he has been seen by consultants several times and had discussed possibility [sic] of cardiac surgery but there are risks involved.

He also suffers from Insulin Dependent Diabetes Mellitus, Hypertension, Asthma, Chronic Kidney Disease, Memory Problem, Anxiety and musculoskeletal pain.

He has had several incidents of chest pain and attended A&E.

From his notes and memory I can say that this patient is at risk of having heart [sic] attack and should avoid any stressful situations all the time.

Regards”.

Cerchez v HMRC [2020] UKFTT 452 (TC);

Denton and others v TH White Limited and others [2014] EWCA Civ 906, [2014] 1 WLR 3926;

Katib v HMRC [2019] UKUT 189 (TCC) at paragraph 56;

Martland v HMRC [2018] UKUT 178 (TCC) at paragraphs 44 to 46;

Websons (8) Limited [2020] UKUT 0154 (TCC);

Jeyeanthan, R (on the application of) v Secretary of State for the Home Department [1999] EWCA Civ 3010, [1999] 3 All ER 231;

NA (Bangladesh) v Secretary of State for the Home Department [2016] EWCA Civ 651;

SA (Non-compliance with rule 21(4))Bangladesh [2022] UKUT 132 (IAC).

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.

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. In Hysaj, Moore-Bick LJ said this at [46]:

“If applications for extensions of time are allowed to develop into disputes about the merits of the substantive appeal, they will occupy a great deal of time and lead to the parties’ incurring substantial costs. In most cases the merits of the appeal will have little to do with whether it is appropriate to grant an extension of time. Only in those cases where the court can see without much investigation that the grounds of appeal are either very strong or very weak will the merits have a significant part to play when it comes to balancing the various factors that have to be considered at stage three of the process. In most cases the court should decline to embark on an investigation of the merits and firmly discourage argument directed to them.”

Hysaj was in fact three cases, all concerned with compliance with time limits laid down by rules of the court in the context of existing proceedings. It was therefore different in an important respect from the present appeal, which concerns an application for permission to notify an appeal out of time – permission which, if granted, founds the very jurisdiction of the FTT to consider the appeal (see [18] above). It is clear that if an applicant’s appeal is hopeless in any event, then it would not be in the interests of justice for permission to be granted so that the FTT’s time is then wasted on an appeal which is doomed to fail. However, that is rarely the case. More often, the appeal will have some merit. Where that is the case, it is important that the FTT at least considers in outline the arguments which the applicant wishes to put forward and the respondents’ reply to them. This is not so that it can carry out a detailed evaluation of the case, but so that it can form a general impression of its strength or weakness to weigh in the balance. To that limited extent, an applicant should be afforded the opportunity to persuade the FTT that the merits of the appeal are on the face of it overwhelmingly in his/her favour and the respondents the corresponding opportunity to point out the weakness of the applicant’s case. In considering this point, the FTT should be very wary of taking into account evidence which is in dispute and should not do so unless there are exceptional circumstances.”.

"Any irregularity resulting from failure to comply with these Rules before an appellate authority has reached its decision shall not by itself render the proceedings void, the appellate authority may, and shall if it considers that any person may have been prejudiced, take such steps as it thinks fit before reaching its decision to cure the irregularity, whether by amendment of any document, the giving of any notice or otherwise.”.

… It does not follow that the application, although it does not have the required declaration, is a nullity….

[…]

I turn to the power contained in Rule 38 of the 1984 Rules. The existence of this power to deal with irregularities confirms that the Tribunal is not intended to allow technicalities to interfere with its responsibility to determine the merits of appeals. Because of a lack of familiarity with English and the procedures of tribunals in this country asylum applicants are likely to make many procedural errors. If they are not to be caused injustice Rule 38 should be given a wide interpretation. I do not accept Mr Pleming's submission that a stricter approach should be adopted than was adopted to the wide power contained in Order 2 r.1 of the Rules of the Supreme Court (see "The Goldean Mariner" [1990] 2 Ll.R. 215). The procedures of tribunals should normally be less and not more strict than the procedures of the High Court. The absence of a declaration would be an irregularity which could if necessary be dealt with under Rule 38.”.

The Upper Tribunal rules did not say that that tribunal must not entertain the application if a request for an extension is not included in the application. If that was what was intended, the rules could easily have said so (paragraph 11);

The result contended for would be manifestly unjust in many cases (paragraph 14);

If the application is to be regarded as a complete nullity, no waiver of the defect would be possible (paragraph 15;

That that was not a tenable view was confirmed by the provisions of rule 7 (paragraph 16); and

“Draco might have approved the position argued for, but it would, in my judgment, require a much clearer provision in order for it to be an acceptable interpretation of the rules. There are no doubt good policy reasons for providing that an application for permission should include within it an application for extension of time and reasons, but the legislator cannot, it seems to me, be taken to have intended by the words that he used that a failure to include a request for extension with reasons in the application was invariably fatal to its success.” (paragraph 19).

In addition, in our view, such a construction could lead to injustice. For example, if the only aspect of rule 21(4) that an application does not comply with is rule 21(4)(f) (which requires the application to state whether the appellant wants the application to be dealt with at a hearing), the Upper Tribunal would have all the material that it requires in order to make a decision on the application without a hearing. In such a case, it would be unfair to deprive an applicant of a decision on the application simply because rule 21(4)(f) had not been complied with. This could not have been the intention of the legislator.

We therefore agree with Mr Spurling that an in-time application which does not comply with rule 21(4) in one or more ways is nevertheless a valid application which must be decided by the Upper Tribunal. If it had been intended otherwise, the UT Rules could easily have said so.”.

Was the first assessment made on 2 November 2017 as HMRC argued, or on 6 November 2017 as the appellant argued?

Were the appeals against all the input tax assessments made on 14 November 2018 as the appellant argued, or on 29 October 2019 as HMRC argued?

In light of the tribunal’s findings on issues (1) and (2) above, how late was each appeal?

For those appeals which were late, was the delay serious and significant?

For those appeals which were late, was there good reason for the delay?

For those appeals which were late, does an evaluation of all the circumstances result in permitting any of the appeals to be made late?

On 28 August 2019, Matthew Whyatt of ASW said in his first witness statement in the winding-up proceedings (page 250)—

“14: … What this does show is that Mr Glen appears to accept that the enquiry stage is not only still open but progressing towards a conclusion which might itself be the subject of (a) an independent review and/ or (b) a formal appeal to the First Tier Tax [sic] Tribunal”.

On 24 September 2019, Matthew Whyatt of ASW made his second witness statement in the winding-up proceedings, saying, among other things that (page 267)—

“8.

… Regrettably, the Company and/ or ASW are still not in a position whereby it can explain to the Court what became of the Appeal that was lodged by the Accountant on or around 14 November 2018 as the Accountant has still not provided the information and/ or documentation requested by the Company and, more recently, by ASW”.

On 25 September 2019, HMRC on their own account (Jack Quinlan’s 10 August 2021 note to Mrs Perrett) knew that the company intended “to file another appeal”. This entry related to the fifth hearing in the winding-up proceedings (page 241, emphasis in original)—

“Fifth Hearing 25/09/2019

• Sought UCO as we had no contact from company or any reduction to the debt. Strongly oppose any adjournment request. The witness statement and application to the tribunal that were filed in November 2018 were rejected by the tribunal in January 2019 as company failed to provide information requested by the tribunal service. Our demand letter for this petition was issued after the tribunal rejection.

• Company granted adjournment to file another appeal”.

On 21 October 2019, solicitor Matthew Whyatt of ASW made his third witness statement in the winding-up proceedings. He mentioned Mr Boland’s health, recorded ASW attempts to extract further information from Mr Chesney and recorded that ASW had discovered from the tribunal that the appeal lodged in November 2018 had been rejected. This third witness statement was made just eight days before the appeal of 29 October 2019 was filed with the tribunal.

On 23 October 2019, again HMRC on their own account (Jack Quinlan’s 10 August 2021 note to Mrs Perrett), knew that the company were “to see if they will file their appeal as the [sic] claim they would on 28/10/2019”. This entry related to the sixth hearing in the winding-up proceedings (page 242, emphasis in original)—

“Sixth Hearing 23/10/2019

• The company asked for address to serve another W/S. The tribunal service who confirmed there was an appeal in 2018 and they wrote to company in November 2018 asking for more information but had no response so they closed case in January 2019 and confirmed there had been no further appeals with them. A 64-8 was sent to the tribunal service authorising a Jessica Wyatt but this is not a form the tribunal use. The tribunal also confirmed that an appeal must be made in 30 days of a decision and that the company were outside of that time with the appeal in 2018.

• Sought UCO at hearing

• Company granted adjournment to see if they will file their appeal as the claim they would on 28/10/2019”.

First, Mr Chesney was having to recreate the history without much of the appellant’s records, since they were with HMRC: see telephone call of 15/3/18 in which Officer Glen “Agreed that agent would need the records to answer some of the queries - agreed a meeting at 13.00 on Tuesday (20/03/18) - where I would return records and the agent would provide records for pre-cred periods.” (page 145).

Second, Christmas and New Year intervened.

Mr Boland’s son has attempted suicide because of Mr Boland’s reduced life expectancy (a cause which has not gone away);

Mr Boland has lost a very close friend to Covid;

Mr Boland has lost a close family member to Covid;

Mr Boland’s long-term partner has been diagnosed with cancer and she is undergoing immediate and intensive treatment for it, the pressure of which is worsening Mr Boland’s own overall condition (it is unclear whether this is the family member referred to in paragraph 13 of Mr Whyatt’s statement whose terminal diagnosis caused Mr Boland to miss a meeting with Mr Chesney, or whether that was a separate family member);

Mr Boland’s treatments for his numerous health conditions were delayed due to the Covid 19 pandemic;

Mr Boland suffered a heart attack during the pandemic;

His condition has so worsened that he is no longer being considered for the triple heart bypass surgery because it is not believed that he would survive that surgery;

Mr Boland has been informed that his life expectancy has reduced significantly and his doctor has said that if Mr Boland managed to survive for five years that would be the best-case scenario;

Mr Boland’s GP letters describe his health up to 15 February 2022—