TC09531 - [2025] UKFTT 00567 (TC)

Paragraph 19(1) Schedule 26 Finance Act 2021 provides that a person may appeal against decision by HMRC that the person is liable to a penalty and under paragraph 19(2), as to the amount of that penalty:

“19(1) A person may appeal against a decision of HMRC that the person is liable to a penalty under this Schedule.

(2)

A person liable to a penalty under this Schedule may appeal against a decision of HMRC as to the amount of the penalty.”

Paragraph 20 provides that an appeal is to be treated the same as appeal of the underlying tax:

“20(1) An appeal under paragraph 19 is to be treated in the same way as an appeal against an assessment to the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC's review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal).”

The provisions of the Value Added Tax Act 1994 governing VAT appeals therefore apply. HMRC must offer a review of the decision under section 83A and section 83G(3) then provides that an appeal to the Tribunal from the conclusion of that review should be made within 30 days of the date of that conclusion:

“(3)

In a case where HMRC are required to undertake a review under section 83C—

(a)

an appeal may not be made until the conclusion date, and

(b)

any appeal is to be made within the period of 30 days beginning with the conclusion date.”

Where an appeal is made late section 83G(6) provides that the appeal may not be made unless the Tribunal gives permission:

“(6)

An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if the tribunal gives permission to do so.”

We also note Rule 20 of The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009

“20(1) Where an enactment provides for a person to make or notify an appeal to the Tribunal, the appellant must start proceedings by sending or delivering a notice of appeal to the Tribunal within any time limit imposed by that enactment.

…

(4)

If the appellant provides the notice of appeal to the Tribunal later than the time required by paragraph (1) or by an extension of time allowed under rule 5(3)(a) (power to extend time)—

(a)the notice of appeal must include a request for an extension of time and the reason why the notice of appeal was not provided in time; and

(b)unless the Tribunal extends time for the notice of appeal under rule 5(3)(a) (power to extend time) the Tribunal must not admit the notice of appeal.”

Where an appeal is made late the principles to be considered by the Tribunal have been set out in William Martland v The Commissioners for HM Revenue and Customs [2018] UKUT 0178 (TCC):

“29…the presumption should be that the statutory time limit applies unless an applicant can satisfy the FTT that permission for a late appeal should be granted, but there is no requirement that the circumstances must be exceptional before the FTT can grant such permission…

44.

When the FTT is considering applications for permission to appeal out of time, therefore, 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. In considering that question, we consider the FTT can usefully follow the three stage process set out in Denton:

(1)

Establish the length of the delay. If it was very short (which would, in the absence of unusual circumstances, equate to the breach being "neither serious nor significant"), 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.

(2)

The reason (or reasons) why the default occurred should be established.

(3)

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.

45.

That 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.

46.

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.”

We have applied the guidance in Martland to the facts of this appeal.