The First-tier Tribunal has considered the case of Golden Grove Trust v HMRC [2023] UKFTT 27 (TC). The trust sought to appeal a VAT assessment and VAT decision beyond the normal time limits. The application was unsuccessful.
The trust’s adviser Mr Warne had argued that the leave for the late appeal was required as an original paper appeal had been lost in the post during the Covid-19 lockdown period. However, the tribunal found the evidence presented for this contradictory and decided that Mr Warne was an unreliable witness and that no appeal had actually been lodged.
The tribunal therefore had to apply the three tests in Martland v HMRC [2018] UKUT 178 (TCC) namely:
- establish the length of the delay and whether it is serious and/or significant;
- establish the reason(s) why the delay occurred; and
- evaluate all the circumstances of the case, using a balancing exercise to 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, and in doing so 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”.
Applying these tests the tribunal refused the late appeal on the grounds that:
- In relation to the assessment, the delay was over two years and four months; in relation to the decision, the delay was over one year and three months. These delays were plainly very serious and significant.
- They occurred because of Mr Warne’s failure to make the appeals by the statutory time limits, and because of the trust’s confidence in his handling of the case.
- Although the consequence of refusing permission was that the trust could not challenge the assessment and the decision at the tribunal, the circumstances of the case were overwhelmingly in favour of refusing permission. This was essentially because:
- significant weight must be given to the failure to respect statutory time limits;
- there was no good reason for the long delays;
- allowing cases to proceed when the appeal has been made out of time prejudices both HMRC and other taxpayers; and
- although Mr Warne had primary responsibility for the delay, the trust shared some of the blame.
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08686.html
Related content from Claritax Books
Value Added Tax, written by Ciaran McGee MA (Oxon), FCA, CTA, is an extensive volume (over 1,000 pages), written primarily for non-VAT specialist accountants and tax advisers.
