TC09670 - [2025] UKFTT 01260 (TC)

Fecha: 23-Oct-2025

THE LAW

THE LAW

19.

The basic approach to applications for permission to make late appeals was, until recently, well established. In William Martland v HMRC [2018] UKUT 178 (TCC) (“Martland”), at [44]- [46], the Upper Tribunal said that:

(1)

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;

(2)

The FTT can usefully follow the three-stage process in Denton;

(3)

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.

20.

In Denton v TH White Ltd (and related appeals) [2014] EWCA Civ 906 the Court of Appeal had set out a three-stage test for relief from sanction applications at [25] – [31]:

(1)

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;

(2)

At the second stage the Tribunal should consider why the failure or default occurred;

(3)

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".

21.

In Medpro Healthcare Limited (1) and Kalvinder Ruprai (2) v HMRC [2025] UKUT 255 (TCC) (“Medpro”) the Upper Tribunal said that the three-stage test set out in Martland was correct, at [88]. However, at [95] – [98] of Medpro Marcus Smith, J. went on to say:

“95.
The question is whether [45] of Martland (quoted at paragraph 6 above) goes further and in referring to the "particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected" was doing what the Court of Appeal did in Denton, and according these factors particular weight. Read on its own, it must be doubted whether Martland was doing this. Martland at [45] is not unequivocally clear, and can be read as merely stressing that these factors matter, as indeed they do. But there can be no doubt that the Upper Tribunal has subsequently followed the Denton approach not merely as to the structure of the discretion (ie the three-stage test) but also as to the (additional, extra) weight to be accorded to the CPR 3.9(a) and (b) factors (ie the "top table" point).
96.
I do not consider this to be a permissible approach in the case of extensions of time under section 83G(6) VATA. The rule change to CPR 3.9 enabled the Court of Appeal to take the approach it did in Denton. The wording in section 83G(6) VATA has not been changed and does not, when construed, permit this aspect of the approach in Denton. The Upper Tribunal's guidance in relation to the exercise of a statutory discretion cannot fetter the statutorily conferred discretion of the FTT, even as to the weighting of relevant factors. There is a fine line to be drawn between the structuring of a discretion and the imposing of an obligation on a tribunal, ex ante, in the evaluation of certain factors. The latter course is permissible only if mandated by a proper construction of the power being exercised.
97.
The wording of section 83G(6) VATA is clear: it tracks not the "new version" of CPR 3.9 but the old version. The Upper Tribunal has placed a fetter on the discretion of the FTT which is not justified by the terms of section 83G(6) VATA. The Upper Tribunal cannot, in the case, by way of binding guidance, direct the FTT as to what weight to place on particular factors when it is considering, in all the circumstances, whether to extend time for appealing. The factors in the old CPR 3.9 and the approach described by the Upper Tribunal in Data Select and Aberdeen City provide sufficient guidance for the FTT to exercise its discretion, as does [44] (but not [45]) of Martland itself.
98.
The question is whether the Upper Tribunal's approach is "clearly wrong". Given the force of the point as advanced by the Appellants, and the frequency with which the FTT applies the Martland discretion, it is vital that this area of the law be clearly stated. It would be unfortunate for this lack of clarity to infect every application for an extension under section 83G(6) VATA. Given these factors, and the conclusion reached in relation to the construction of section 83G(6) VATA, Marcus Smith J concludes that the practice adopted in the FTT with regard to Martland and the section 83G(6) VATA power is clearly wrong. He would therefore allow the appeal on Ground 4 as well as on Grounds 1 to 3.”

22.

The parties agreed that we should follow Medpro as a matter of precedent, and we do so. We therefore applyithe three-stage Martland test, but we are not obliged to give any particular weight to the CPR 3.9(a) and (b) factors.