Case Number: TC09652
By remote video hearing
Appeal reference: TC/2023/16571
Eat out to help out scheme – late appeal application – Martland and Medpro considered – application refused
Judgment date: 30 September 2025
Before
TRIBUNAL JUDGE MCGREGOR
DEREK ROBERTSON
Between
WOLF & WHISTLE LIMITED
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Miss Sinead Hill, accountant for the Appellants
For the Respondents: Miss Victoria Halfpenny, litigator of HM Revenue and Customs’ Solicitor’s Office
DECISION
Introduction
With the consent of the parties, the form of the hearing was V (video). A face to face hearing was not held because a remote hearing was appropriate. The documents to which we were referred are a bundle of 314 pages.
Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.
This decision concerns an application by the Appellant to be allowed to bring a late appeal to HMRC against a number of penalties and an assessment for income tax.
law
Under paragraph 9 of Schedule 16 to the Finance Act 2020 (“FA 2020”) HMRC may issue an assessment to recover an overpayment of the payments made to taxpayers under the Eat Out to Help Out Scheme (“EOTHOS”).
Where a taxpayer has failed to notify HMRC of their liability to income tax arising as a result of overpayments of EOTHOS and the person knew, at the time the income tax first became chargeable, that the person was not entitled to the amount of the coronavirus support payment in relation to which the tax is chargeable, HMRC may raise a penalty for that failure under Schedule 41 FA 2008 as applied by paragraph 13 of Schedule 16 to FA 2020.
Under paragraph 17 of Schedule 41 to FA 2008, a person may appeal against a decision that a penalty is payable by that person or as to the amount of that penalty.
Under paragraph 18 of Schedule 41 to FA 2008, such an appeal is treated in the same way as an appeal against an assessment of tax, which means that the relevant sections of the Taxes Management Act 1970 are relevant for determining how the appeal must be brought and when.
Section 31A of TMA 1970 specifies that appeals must be made in writing within 30 days after the specified date to the relevant HMRC officer. Sub-paragraph (4) of that section states that, where the appeal is against an assessment other than a self-assessment (which an appeal against a penalty is deemed to be in accordance with the provision in paragraph 10 above), the specified date is the date on which the notice of assessment was issued and the relevant officer is the officer by whom the notice was given.
Under section 49(2), a person that may bring an appeal to HMRC but has not done so within the relevant time limit may bring a late appeal if they obtain the permission of either HMRC or this Tribunal.
Rule 20 of the FTT Rules provides:
A person making or notifying an appeal to the Tribunal under any enactment must start proceedings by sending or delivering a notice of appeal to the Tribunal.
…
If the notice of appeal is provided after the end of any period specified in an enactment referred to in paragraph (1) but the enactment provides that an appeal may be made or notified after that period with the permission of the Tribunal
the notice of appeal must include a request for such permission and the reason why the notice of appeal was not provided in time; and
unless the Tribunal gives such permission, the Tribunal must not admit the appeal.
In summary therefore, we have a discretion to allow an application for a late appeal against a penalty for failure to notify liability to income tax arising as a result of an overclaim under the EOTHOS.
In exercising that discretion, we must follow the principles and guidelines set out by the higher Courts and Tribunals, summarised by the Upper Tribunal in Martland v HMRC [2018] UKUT 178 (TCC). I set out the section from paragraph 44 in full:
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:
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.
The reason (or reasons) why the default occurred should be established.
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.
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.
Shortage of funds (and consequent inability to instruct a professional adviser) should not, of itself, generally carry any weight in the FTT's consideration of the reasonableness of the applicant's explanation of the delay: see the comments of Moore- Bick LJ in Hysaj referred to at [15(2)] above. Nor should the fact that the applicant is self-represented – Moore-Bick LJ went on to say (at [44]) that “being a litigant in person with no previous experience of legal proceedings is not a good reason for failing to comply with the rules”; HMRC's appealable decisions generally include a statement of the relevant appeal rights in reasonably plain English and it is not a complicated process to notify an appeal to the FTT, even for a litigant in person.
We note that there has recently been a decision of the Upper Tribunal (Medpro Healthcare v HMRC [2025] UKUT 255) in which it is stated that, in as far as the guidance in Martland requires this Tribunal to give particular weight to the need to enforce compliance with time limits and the need for litigation to be conducted efficiently and at proportionate cost, the decision was wrong. These two factors are of course still relevant to the balancing exercise but they are not to be given heavier weight than any other factor by definition.
facts
The following key background facts are found from the document bundle.
Wolf & Whistle Limited (WWL) is a company that runs a pub in Belfast. It made claims under the EOTHOS.
On 5 October 2021, HMRC opened a compliance check into those claims and requests for information were made. This was sent by post to WWL’s Belfast address on record, for the attention of the director, Mr Conlon,
On 16 November 2021, HMRC issued a formal information notice to WWL at its Belfast address on record, for the attention of the director, Mr Conlon, which required the provision of information and documents, with a deadline of 16 December 2021.
Having received nothing by 20 December 2021, HMRC chased WWL by email, who then requested an extension of time until mid-January. HMRC granted this extension to 10 January 2022.
HMRC chased further by email on 17 January, inviting a response by 20 January 2022. On the same day, HMRC sent a request for WWL to sign the email protocol to enable correspondence by email.
HMRC made two further telephone calls on 15 and 24 February 2022 chasing WWL. Sinead Hill, accountant for WWL, explained in that phone call that she had been off with COVID and would now mail over the information.
On 3 March 2022, a further information notice was issued to WWL by post, for the attention of Mr Conlon, the director. It was mailed to the Belfast address on record. It gave a new deadline of 4 April 2022.
On 1 June 2022, a penalty notice was issued to WWL for the failure to comply with the information notice. From this point on all correspondence was issued to the Belfast address by post, always for the attention of Mr Conlon.
On 22 July 2022, HMRC issued a letter to WWL explaining that an assessment would be raised in relation to overclaims under EOTHOS. It referred to not having received information following requests.
On 31 August 2022, HMRC raised that assessment, amounting to £27,373.72.
On 7 November 2022, HMRC raised a late payment penalty of 5%, being £1,368.69.
On 16 November 2022, HMRC issued a letter to WWL asking questions relating to WWL’s behaviour in order to be able to assess whether to charge penalties. It gave a deadline of 17 December 2022.
On 12 January 2023, HMRC issued a penalty warning letter offering a further opportunity to provide further information until 13 February 2023.
On 14 February 2023, HMRC issued a notice of penalty assessment, charging a penalty of £27,373.72.
On 16 March 2023, HMRC issued a letter closing the compliance check into the EOTHOS claims.
On 5 April 2023, HMRC issued a further late payment penalty of 5%, being £1,368.69 on the basis the amount had been outstanding for 6 months;
On 12 September 2023, HMRC issued a letter to WWL warning that HMRC were considering publishing details of WWL on their Deliberate Tax Defaulters list. It invited representations as to why HMRC should not publish.
On 5 October 2023, HMRC issued a further late payment penalty of 5%, being £1,368.69 on the basis the amount had been outstanding for 12 months;
On 25 October 2023, HMRC issued a letter to WWL explaining that they were proceeding to publish, having received no representations.
On 14 November 2023, Sinead Hill emailed HMRC (replying to the 17 January 2022 email) stating that she had recently received a letter regarding penalties for the EOTHOS and stating that she had thought that everything was OK after she sent the information back in January 2022. It further asked whether they could now appeal as they were due to be published under the deliberate tax defaulters list which had only just come to their attention.
On 16 November 2023, HMRC issued a letter to WWL rejecting their appeal as late without a reasonable excuse and explaining that it was possible for WWL to apply to the Tribunal for permission to appeal late.
On 21 November 2023, Sinead Hill requested copies of the correspondence that was set from July 2022 onwards for the purposes of the appeal. These copies were provided on 22 November 2023.
WWL appealed using the online form on 22 November 2023.
parties arguments
Ms Hill submitted the following in support of the application:
The Appellant accepts that the appeal was late;
Appeal relates not only to the penalty for failure to notify but to the underlying substantive assessment as well;
The lateness was primarily caused by the fact that they had not received any of the post delivered to WWL from HMRC;
The first they knew about any ongoing issues to do with EOTHOS or other penalties was when they received the letter regarding being published as a deliberate tax defaulter;
They had sent the information in January 2022 and thought that everything was resolved;
The pub had closed in January 2023 for refurbishment as the pub was making losses and they needed to make changes;
They did not ignore correspondence from HMRC;
They had continued to comply with other issues such as VAT and PAYE during this period using the online account but had not seen anything there related to EOTHOS so were not aware that there was a problem.
HMRC submits that:
The length of the delay was serious and significant for the majority of matters under appeal:
For the Schedule 36 penalty, being from 1 July 2022 to 14 November 2023, being over 18 months;
For the EOTHOS assessment, from 30 September 2022 to 14 November 2023, being 15 months;
For the failure to notify penalty, from 17 March 2023 to 14 November 2023, being just under 8 months;
For the late payment penalties:
Just under a year for the initial late payment penalty, from 7 December to 14 November 2023;
Just over 6 months for the 6 month late payment penalty, from 5 May 2023 to 14 November 2023;
10 days for the 12 month late payment penalty, from 4 November to 14 November 2023.
The reasons provided by the Appellant are insufficient to justify the delay of between 6 and 18 months and have not been proven, in particular:
No record of post returned undelivered to the relevant address;
All post was sent to the same address throughout and some letters, in particular were clearly received because WWL responded to them, in particular the letter dated 20 December 2021 and that dated 21 November 2023;
If a business closes its premises, it is required to put in place a re-direct system or provide HMRC with a different address for correspondence;
The closure occurred from January 2023 whereas most of the letters in question were issued in 2022;
Assuming a compliance check was closed without any further correspondence from HMRC is not a reasonable course of action;
HMRC did not receive the information WWL claim to have sent in early 2022 and WWL have been inconsistent about this submission:
The initial appeal sent to HMRC, WWL stated that it was sent in January 2022
When the covering letter was forwarded to HMRC in November 2023, the attachments were not included and the letter was dated 2 February 2022;
Notes of a phone call between HMRC and WWL on 24 February 2022 noted that Ms Hill had been absent from COVID and extended the deadline for submission of the information, which casts doubt on the assertion that it had already been submitted in either January or earlier in February;
HMRC could not correspond by email because WWL did not complete the email protocol requested in January 2022;
In assessing all the circumstances of the case, HMRC submit that:
WWL has shown repeated failures to comply with deadlines from the beginning of the compliance check and has shown consistent lack of diligence in their tax affairs, despite being aware of the deadlines;
To allow the late appeal would require HMRC to divert resources to defend an appeal that they were entitled to consider was closed.
WWL has, in the same period, been able to submit its corporation tax returns on time and entered into a time to pay arrangement to address their VAT debt; therefore they should have been in a position to bring an appeal to HMRC, which is relatively straightforward;
The real reason they are now trying to bring an appeal late is because the deliberate tax defaulters publication has become a possibility;
Allowing a late appeal in this instance is inconsistent with the principles of good administration of justice which require litigation to be conducted efficiently and at proportionate cost;
While HMRC note that a detailed assessment of the merits of the underlying case is not necessary, their view is that the substantive appeal is weak because no evidence had been submitted to support their challenge to the assessment for overclaimed EOTHOS.
discussion
There was an initial question about what was in scope of the appeal.
WWL’s original appeal notice referred only to the failure to notify penalty. However, following later correspondence WWL confirmed that it intended to appeal not only the penalties but also the assessment. Ms Hill confirmed this at the hearing.
On the first question of establishing the length of the delay and considering whether this delay was serious or significant, there is no dispute here as to the fact that the appeal was late, or to the dates. Leaving aside the appeal against the last late payment penalty, all the appeals were between 6 and 18 months late.
Such a level of delay in the context of an appeal deadline, in each case, of 30 days is no doubt both serious and significant.
The last appeal was only 10 days late, which is less serious. However, the reasons given for all the lateness were the same and therefore we move on to consider the second and third stages on all matters together.
On the second question, the main reason put forward is that WWL did not receive any of the correspondence. HMRC’s evidence is that the letters were all sent by post to the same address as all other correspondence which was received.
Ms Hill’s evidence was initially focused on the fact that the pub was closed from January 2023. This turned out to be irrelevant to the question at hand because, when pushed to consider the period when most of the letters were sent, during which the pub was open, she confirmed that the correspondence address concerned is a head office address, not the pub. She further explained that she had in fact been working mainly from home during the period, but periodically checking correspondence at the head office address. However, since most correspondence was by email, this was sporadic. In any event, she stated that the letters were not received there.
In addition to the documentary inconsistencies in dates highlighted by HMRC, we found Ms Hill’s evidence to be inconsistent and, particularly when asked about the receipt of letters during the course of 2022, unclear at best.
On the balance of probabilities, we find that HMRC did send the relevant letters to the head office address and we find that the likelihood of all the letters charging assessments and penalties going missing to be very low, particularly when the original requests for information and the letter notifying the possible publication as a deliberate tax defaulter were quite clearly received at the same address.
Turning to the third question we must make an evaluation of all the circumstances of the case, which will involve a balancing exercise between the merits of the reasons given for the delay and the prejudice that would be caused to both parties by granting or refusing permission.
There are several factors of prejudice to consider. Firstly the prejudice to the Appellant in not being able to pursue their appeal. This factor weighs in support of allowing the late appeal.
On the other side, HMRC would be prejudiced by having to defend an appeal on a matter that they considered to be closed. This factor weighs against allowing the late appeal.
There was very limited discussion of the merits of the case, not least because all the evidence that WWL was intending to rely on in the substantive appeal was lodged with the Tribunal and HMRC very shortly before the hearing of the application. As a result, we do not consider this factor weighs in either direction.
Having concluded that the likelihood of all the relevant letters being lost in the post is very low, we must consider whether, in this balancing exercise, we can consider the possibility of lost post could constitute a good reason for the delay in this case. We find that it cannot. Even if we accept at face value that the relevant information was provided in response to HMRC’s original information notice and that these specific letters were not recovered from the empty head office address, it was not a reasonable position for WWL to take to assume that HMRC had simply accepted WWL’s information and sent no further correspondence for over 18 months without taking some action. Ms Hill suggested that most communication was managed effectively by email, but did not return HMRC’s email protocol, which would have enabled that communication.
Drawing these factors together in the balancing exercise, we do not consider that Wolf & Whistle Limited has established a good reason for the delays in bringing the appeal and, in all the circumstances, we do not consider that it is appropriate to give permission for them to bring a late appeal in this case.
For the avoidance of doubt, we confirm that our decision would have been no different if particular weight had been given to the two matters identified in the Medpro decision referred to above.
decision
For the reasons set out above, Wolf & Whistle Limited’s application for permission to appeal to HMRC late is refused.
Right to apply for permission to appeal
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: 30th SEPTEMBER 2025