In the case of Meydan Asset Management Ltd v HMRC [2026] UKFTT 613 (TC), the FTT has dismissed an appeal against late payment penalties in respect of six accelerated payment notices (APNs) issued in respect of the Appellant’s participation in the Goldfinger aka Sally, Echo or Karat tax avoidance scheme.
Accelerated Payment Notices; Late payment penalties; Reasonable excuse; Special circumstances; Schedule 56 FA 2009; APN regime
The company argued that certain procedural failings on HMRC’s part meant that it did not have adequate information regarding the APNs and thus it had a reasonable excuse for non-payment as “a reasonable taxpayer could not be expected to pay substantial sums ‘blind’ without being put in possession of the material said to justify the demand”. Considering its powers, the FTT noted that “It is common ground between the parties that the Tribunal has no jurisdiction to determine the validity of the Accelerated Payment Notices themselves”. The FTT then judged that:
“In the present case, we find that the Appellant’s decision not to pay the APNs was not caused by the asserted absence or late provision of procedural material, but by its settled position that the APNs should be challenged rather than complied with. … Although the Appellant did seek further information from HMRC and expressed continuing dissatisfaction with the material provided, there was no evidence that payment would have been made had the requested documents been produced earlier or in a different form. … That finding is critical to our jurisdictional analysis. Once it is accepted that non-payment was driven by a substantive belief that the liabilities should not be paid pending challenge, the asserted procedural deficiencies cannot be treated as explanatory of the Appellant’s conduct. To give them decisive weight in those circumstances would require the Tribunal to embark on an assessment of whether the alleged procedural steps were, in fact, required and whether their absence undermined the APNs. That would be to trespass directly into the forbidden territory identified in Beadle.”
The FTT also judged that the company’s belief that the APN’s were unlawful was not a reasonable excuse for non payment as “APNs are deliberately designed to require payment notwithstanding genuine dispute and pending litigation. … The Appellant’s position depended on complex and contested arguments about GAAR notices, agency, service, and the interpretation of statutory conditions. These are precisely the matters which Parliament intended to be resolved separately from the payment obligation.”
The FTT also rejected claims that the shortage of funds arising from Mr Esse’s expensive divorce proceedings represented a reasonable excuse for non-payment, the FTT noting that “the financial constraints relied upon were personal to Mr Esse and not attributable to events affecting the Appellant company itself” and that “the Appellant’s dependence on Mr Esse for funding was a product of its own corporate structure and historic decisions. … The absence of alternative funding options therefore reflected the Appellant’s chosen arrangements rather than a supervening external event.”
A refusal by HMRC to grant a time to pay arrangement was also not a reasonable excuse as the proposal had not demonstrated a long-term ability to pay and “there is no basis on which the refusal of the proposal could convert an inability to pay into a reasonable excuse under paragraph 16.”
Finally, the FTT confirmed that the were no special circumstances that merited a reduction:
“Ultimately, the Appellant’s challenge to HMRC’s special circumstances decision amounts to a disagreement with the evaluative outcome, not to the identification of a flaw in the decision making process. The authorities do not permit the Tribunal to substitute its own view in those circumstances.
We also note that the penalties imposed were those fixed by statute at 5% of the unpaid amounts. They were not increased by HMRC, nor applied selectively or inconsistently. In those circumstances, no issue of disproportionality or irrationality arises.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/613
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