The First-tier Tribunal has judged the case of Singh & Kainth T/A Western News v HMRC  UKFTT 43 (TC).
The taxpayers were seeking to make a late appeal against an assessment. The tribunal rejected their appeal.
In deciding whether to exercise their discretion to accept a late appeal the tribunal considered the guidance given to the FTT in William Martland v HMRC  UKUT 178 (TCC. This recommended following a three-stage process:
- Establish the length of the delay. If it was very short 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.
Applying these tests, the tribunal concluded:
The exact date of the appeal was under dispute but even if the earliest possible date was accepted then the delay was nearly two and a half years, clearly significant and substantial.
With regards to the reasons for the delay the taxpayers had argued that they had relied on their agent who had failed to act on a timely basis, they believed that there was an ongoing dialogue with HMRC and as such a formal appeal was not required and Mr Singh had been out of the country for significant amounts of time visiting his sick father in India.
It was held that there was evidence that the taxpayers were fully aware of the agent’s lack of action, the correspondence from HMRC regarding the assessment and the appeals process was clear and there was no evidence to suggest that Mr Singh had been uncontactable for a significant amount of time.
The tribunal concluded that there was therefore no real reason for the delay.
Finally, the tribunal considered the grounds for the appeal and whether the taxpayers would be prejudiced if an appeal was not allowed. The assessment had been made on a best judgement basis and HMRC had commented that in view of the lack of evidence it may have been excessive. However, the tribunal noted that equally in view of the lack of evidence the taxpayers would have difficulty making an arguable case against the assessment.
The tribunal noted that the taxpayer’s arguable case must be set against the prejudice to the finality of litigation, which the appeal time limits sought to address, and the absence of any good reason for failing to make the appeal for the very significant period of nearly two and a half years.
On balance the tribunal concluded the application for the late appeal did not meet the Martland conditions and was refused.