Case Number: TC09587
By remote video hearing
Appeal reference: TC/2024/00267
Late Appeal – Martland applied
Judgment date: 17 July 2025
Before
TRIBUNAL JUDGE RUPERT DAVIES
Between
ADRIAN ATKINS
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Mr Jeff Wine, Wine and Co Accountants.
For the Respondents: Mrs Stephanie Skipper, litigator of HM Revenue and Customs’ Solicitor’s Office.
DECISION
Introduction
With the consent of the parties, the form of the hearing was video. All parties attended via Microsoft Teams.
Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.
The Appellant, by way of an application included in his Notice of Appeal, recorded as having been generated on 15 January 2024, seeks permission to commence a late appeal against the Respondents’ decision to deny a VAT credit in the sum of £110,455 relating to the VAT return period referenced 4/16. The original decision was communicated in a letter dated 17 July 2020, and the decision upon review was set out in a letter dated 17 December 2020.
The documents to which I was referred were in a hearing bundle of 210 pages. I have also seen an email dated 6 November 2024 addressed to the Appellant’s representative, Jeff Wine, sent from the Tribunal, asking for a response to the Respondent’s application for further and better particulars.
At the outset of the hearing, Mr Wine stated that an additional bundle of documents, comprising communications between the Appellant and HMRC that were not in the bundle, had been sent to the Tribunal and the Respondents on Friday 6 June 2025, along with a printout from Taxation.co.uk regarding the case of Dennison v HMRC [2024] UKFTT 364 (TC). I had not received that bundle or the authority. Mrs Skipper for the Respondents stated that she had received some documents from the Appellant, but not a bundle of 30 pages.
The Tribunal also noted that many of the documents referenced in the “Respondents’ Notice of Objection to Late Appeal Application”, were not present in the bundle. These documents were listed as a chronology in a section entitled “Background”. Mr Wine agreed that this chronology was correct and properly described the correspondence that was referenced. He stated that it was not necessary for the Tribunal to see the additional bundle of 30 pages as he would not be referring to any other documents aside from those described.
Both parties therefore agreed that the appeal could be heard and decided upon on the papers within the hearing bundle the chronology within the “Respondents’ Notice of Objection to Late Appeal Application”.
FACTS
The following facts were found from the documents produced in the bundle, and where the documents were not included in the bundle, the chronology and contents of the letters were agreed as set out above.
On 19 February 2016 the Appellant notified the Respondents that he was making a land purchase and requested confirmation that he would be reimbursed the VAT that would be paid upon it.
On 26 February 2016 the Respondent replied by letter stating that the repayment would need verification and requesting further information and documents relating to the purchase and intended use of the property.
On 19 July 2017 the Appellant notified the Respondents of an Option to Tax (OTT) with an effective date of 10 February 2016.
On 4 September 2017, the National Option to Tax Unit (NOTTU) responded to the notification. The notification was considered to be a belated notification and the Respondent asked for further information including evidence to support the date that the decision effective date requested, and a signed statement confirming that all tax and VAT treating to the property had been properly accounted for.
On 17 October 2017, Wine & Co (the Appellant’s agent) supplied a copy of the draft Completion Statement for the purchase of property called “The Piggeries”, detailing a purchase price of £691,629 and £110,455 VAT.
On 4 January 2018, the Respondents wrote to the Appellant advising that until the OTT was resolved the VAT did not relate to taxable supplies. The letter re-requested the outstanding information.
On 15 February 2018 the Respondents again wrote to the Appellant requesting the information.
On 17 July 2020 the Respondents wrote to the Appellant notifying him that that the refund of VAT totalling £110,455 claimed through the 04/16 VAT return was denied. The letter stated that the decision could be reviewed if the Appellant obtained a decision from the NOTTU allowing the belated notification. The letter “strongly advise[d]” the Appellant to respond to the letter dated 15 February 2018. The letter offered an internal review and stated “If you do not want a review, you can appeal to HM Courts and Tribunal Service, but you must do this within 30 days of the date of this letter”.
On 4 August 2020, the Appellant’s agent requested a review.
On 10 September 2020, the Respondent’s Review Team acknowledged the request for a review, and stated, “Unless I hear to the contrary from either you or your agent, I will assume that you have no objection to the review period being extended so that it expires on 17 December 2020”.
On 17 December 2020, a review letter was issued, upholding the decision. The letter advised the Appellant that if the decision was not agreed, then an appeal should be notified to the Tribunal within 30 days of the date of the letter, although, due to the Covid 19 pandemic, HMRC would not object to a late appeal if such notification was made within 3 months of the end of the 30-day period.
On 21 December 2020, the Appellant’s agent wrote to the Respondents stating the Appellant’s outstanding £110,455 input tax payment should be repaid because the review conclusion letter was received on 21 December 2020, which was 4 days after the agreed extension and 4 days after the date on the letter.
On 04 January 2021, the Respondents replied, stating that the review was not concluded late and advised that the only remaining option was to lodge an appeal with the Tribunal.
On 31 May 2022 a warning of bankruptcy letter was sent to the Appellant in respect of outstanding taxes of £111,836.34.
On 30 August 2022 a warning of bankruptcy letter was sent to the Appellant in respect of outstanding taxes of £114,844.33.
On 9 September 2022 the Appellant wrote to the Respondent asking it to refrain from taking further action until, “we have the opportunity to speak to you about this matter in full”.
On 15 September 2022, the Respondent wrote to the Appellant stating that if the Appellant wished to take the matter further, the Appellant should appeal to the Tribunal, together with a reason for the lateness of the appeal.
On 26 October 2023, the Appellant wrote to the Respondent’s Debt Enforcement department, stating that the VAT reclaim had “never been resolved”, noting that the Respondent had advised an appeal to the Tribunal in its letter dated 15 September 2022 and stating “However the matter goes back to 2016 and one wonders whether the Tax Tribunal would accept our late appeal”. The letter went on to state:
“Can you please confirm that if we now appeal to the Tax Tribunal to hear the case, HMRC will NOT OPPOSE this request.”
The Appellant’s Notice of Appeal was generated online on 15 January 2024. In the section entitled “Reason for Late Appeal”, the Appellant wrote, “We are late with our appeal because of ongoing issues caused during the pandemic”. In the section entitled “Grounds of Appeal”, the Appellant wrote “We do not agree with the HMRC decision not to repay the amount of VAT under discussion”.
On 19 February 2024 the Respondents applied to the Tribunal Rule 5(3)(c) and (d) of the Tribunal Procedure (First-Tier Tribunal) (Tax Chamber) Rules 2009 for directions requiring that the Appellant file and serve amended grounds of appeal regarding both the substantive appeal and the late appeal application. The application requested that:
“a) The amended grounds should detail the reasons why the appeal is lodged 3years and 29 days late.
b) The amended grounds of appeal should expand upon the reason of‘ongoing issues caused during the pandemic’.
c) The amended grounds of appeal in respect of the substantive matter shoulddetail why they disagree with the Respondents decision to disallow the inputtax claim in VAT period referenced 04/16, totalling £110,455.00.
d) The amended grounds of appeal should detail the legal and factual groundsrelied upon in support of their appeal. The Appellant should indicate whythey believe the facts or legal reasoning relied upon by the Respondents areincorrect”
On 13 June 2024, the Tribunal directed further and better particulars from the Appellant by 27 June 2024.
On 20 November 2024 the Appellant responded. In a document entitled “Answers to the Respondents’ Application for Further and Better Particulars” the Appellant set out:
That the reason that the appeal was lodged 3 years and 29 days late was because of long negotiations between the Appellant and the Respondent’s representatives since 2016. On 15 September 2022 HMRC Debt Enforcement suggested that the Appellant appeal to the Tribunal.
The pandemic “may” have slowed the progress down but it was impossible to agree anything with HMRC either before or after the pandemic.
The Appellant has obtained the original vendor’s “Opt to Tax” which was dated 2 February 2016 with an effective date of option of 6 January 2016. The Appellant purchased the property on 10 February 2016 and “we wonder whether this may have caused a problem.”
The Appellant believed that the VAT should be repaid.
SUBMISSIONS
Mr Wine for the Appellant initially set out a history of, and grievances with, the Appellant’s previous dealings with the Respondents since 2015, but agreed that this was not relevant to the matter at hand. He set out three substantive points in relation to his application, although I have considered and taken account of all the submissions made on behalf of the Appellant. I understood these three points to be as follows (and Mr Wine confirmed my summary):
That the review decision dated 17 December 2020 was out of time, having been received on 21 December 2020. This was 4 days later than the extension agreed with the Respondents, which required the decision to have been received by 17 December 2023. By way of letter dated 21 December 2020, the Appellant stated that it considered the review to be late and invited the Respondents to repay the VAT. The Respondents reply, by email dated 4 January 2021, stated that they considered the review to have been notified on time.
In default of the review being completed on time, HMRC ought to have undertaken an assessment, which they had not done. Accordingly, there was no decision to appeal, and the Appellant had only appealed because it had been invited to by the Respondents in subsequent correspondence. I was invited to consider the case of Dennison v HMRC [2024] UKFTT 364 (TC) (“Dennison”).
In the correspondence dated 26 October 2023, the Appellant requested that the Respondents confirm that they would not oppose any late notification of the appeal to the Tribunal. HMRC had responded by letter dated 21 November 2023. No copy of that letter was made available to the Tribunal, but Mr Wine agreed that the Respondents did not state within it that they agreed not to oppose any such late appeal. However, he submitted that the lack of a substantive response to that request should be considered to be an agreement not to oppose the late appeal.
There were delays as a result of Covid-19, particularly in 2020.
In reply, Mrs Skipper for the Respondents stated that she was content to deal with these points, even though they were not points raised in the Notice of Appeal or in the Appellant’s response to the request for further and better particulars.
Mrs Skipper relied upon the grounds as set out in the “Respondents’ Notice of Objection to Late Appeal Application”, in which the Tribunal is invited to apply the test set out in William Martland v HMRC [2018] UKUT 178 (TCC) (“Martland”). It is argued that the delay in bringing the appeal was both serious and significant, that there was no good reason for the delay and that, in consideration of all of the circumstances, the merits of the appeal were weak and there should be reliance on time limits.
In addition, she submitted:
The review was in time. She placed reliance on HMRC’s internal manual “Appeals reviews and tribunals guidance” at ARTG4690.
If the review decision was out of time, the default position is that the original decision stands and that decision ought to have been appealed instead.
The case of Dennison is distinguishable as it is a direct tax case.
THE LAW
The approach to applications for permission to make late appeals is well established. In Martland. At [44]-[46], the Upper Tribunal stated that:
In considering applications for permission to appeal out of time, 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;
The FTT can usefully follow the three-stage process in Denton;
At the third stage, the 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. The FTT’s role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist; and (4) 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 Denton v TH White Ltd (and related appeals) [2014] EWCA Civ 906 the Court of Appeal had set out the three-stage test for relief from sanction applications referred to in Martland at [25] – [31]:
The first stage is to identify and assess the seriousness or significance of the failure to comply with any rule, practice direction or order. If the breach is not serious or significant then relief from sanctions will usually be granted and it will usually be unnecessary to spend much time on the second or third stages. If, however, the Tribunal decides that the breach is serious or significant, then the second and third stages assume greater importance;
At the second stage the Tribunal should consider why the failure or default occurred;
At the third stage the Tribunal should consider all the circumstances of the case, so as to enable it to deal justly with the application.
I have also considered the provisions of the Value Added Tax Act 1994 (“VATA”) and Section 7 of The Interpretation Act 1978.
Section 83F (6) provides that HMRC must give notice of the conclusions of a review within a period of 45 days beginning with the relevant date or any such period as HMRC and the taxpayer may agree.
Section 83F (8) VATA provides that:
“Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the review is to be treated as having concluded that the decision is upheld.”
Section 83F (9) VATA provides that:
“If subsection (8) applies, HMRC must notify P or the other person of the conclusion which the review is treated as having reached.”
Section 98 VATA states:
“Service of notices.
Any notice, notification, requirement or demand to be served on, given to or made of any person for the purposes of this Act may be served, given or made by sending it by post in a letter addressed to that person or his VAT representative at the last or usual residence or place of business of that person or representative.”
Section 7 of The Interpretation Act 1978 states:
“Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”
DISCUSSION
The Notice of Appeal ought to have been filed within 30 days of the issue of the Respondents’ decision upon review dated 17 December 2020 (Section 83G VATA) The Respondents stated in their decision letter that they would not object to appeals lodged within 3 months of the 30-day appeal period. The Notice of Appeal was generated on 15 January 2024, which was more than 2 ½ years out of time of both the statutory time limit and the Respondents’ extended discretionary time limit. I consider that to be both serious and significant. The Appellant also concedes that, in the Respondents’ letter dated 15 September 2022, HMRC Debt Enforcement made another suggestion that the Appellant appeal to the Tribunal; the Appellant waited over a year after that suggestion before making an appeal, a period that I find would be both serious and significant by itself.
Moving to the second stage, I am not persuaded that there was a good reason for the delay.
The explanation put forward in the Notice of Appeal that the delay was due to “ongoing issues caused during the pandemic” is inadequate, with no explanation as to what the “issues” were or why they caused delay. The Appellant was invited to expand upon those reasons by way of filing amended grounds, but, if anything, the amended grounds stepped back from the original grounds by stating only that the pandemic “may [my emphasis] have slowed progress”. Again, no proper or cogent explanation was forthcoming in that response. In submissions, the Appellant referred only to delays in 2020, with no further explanation as to how the timing of the appeal was affected.
In submissions, Mr Wine pressed the argument that the review decision under appeal was invalid and stated that the only reason that the appeal was brought was the invitation from the Respondents.
The validity of the review decision is a matter that goes to the merits of the appeal, to be considered at the third stage. I do not find that Appellant’s assertion that that the reason that the appeal was brought at all was due the Respondents’ invitation, is a good reason for bringing the appeal late, not least because the Appellant was reminded of his appeal rights at many stages, including in the original decision and the review decision letters.
In my consideration of the third stage of the balancing exercise, I 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. In respect of the prejudice to both parties, I have considered the prejudice to the Appellant in not being permitted to pursue his appeal. As set out in Martland at [46], the Tribunal should consider the arguments of the case in outline so it can form a general impression of its strength or weakness to weigh in the balance.
The Appellant’s grounds of appeal, and the replies to the request for amended grounds of appeal, do not set out any substantive grounds over and above disagreeing with the Respondent’s decision. In correspondence, the Appellant challenged the validity of the review decision for reason of late notification, and that argument was again raised in oral submissions. Considering sections 83F and 98 VATA and section 7 of The Interpretation Act 1978, it is clearly arguable that the review decision was notified late. The case of Dennison to which I was referred, does not assist me any further.
However, the consideration of the merits is a matter that goes to the prejudice to the parties. In the event of a successful appeal of the review decision, there is a strong argument that the default position would be that the original decision (that reached the same conclusion) would be upheld (s. 83F (8) VATA). If that were the case, even if the Appellant were to succeed in challenging the validity of the review decision, he would be no better off. Conversely, the Appellant’s submission that the default position would be that there was no valid assessment was not supported by any further reasoning, and I find that it is no more than arguable.
The Respondents submit that should the Application be allowed, they would be prejudiced in that they will have to divert resources to defend an appeal which they were entitled to consider closed, especially given the significant length of the delay. I consider that the prejudice to HMRC is more limited as a factor to weigh in the balance as compared to that which the Appellant will suffer by loss of the chance to argue his appeal.
Taking all of these points into account, I find that the prejudice to the Appellant in not being permitted to continue his appeal does not outweigh the significance and seriousness of the delay in bringing it.
I do not find that the Appellant’s request that the Respondents do not object to any late appeal, is material. This request was made in October 2023 when considerable time had already elapsed, and in any event, the Respondents did not agree to the request.
Stepping back and looking at all the circumstances, I conclude that the application to permit the late appeal should be refused.
DECISION
The application to make a late appeal is dismissed.
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: 17th JULY 2025
