TC09531 - [2025] UKFTT 00567 (TC)

Mr Kaney for the appellants argued that the appeals were delayed because the taxpayers were not aware of the penalty and PLN notices. He argued that HMRC cannot assume that Ms Adeosun for herself and as a director of NNN saw any of the relevant letters and they have no evidence to that effect.

Mr Kaney said that he had not been involved until the ADR. He had included the wording in the grounds of appeal as it was perhaps a polite way of explaining the position at a time when he did not know entirely what had happened and nothing should be read into the wording.

Further, even if Ms Adeosun was aware of the notices, what is clear is that the appellants relied upon their accountant to resolve the position with HMRC. Ms Adeosun, as director and in her personal capacity as regards the PLN, could not be expected to understand the difference between the penalty notices and the substantive VAT dispute. It is unreasonable for HMRC to expect Ms Adeosun and NNN to have submitted the penalty and PLN appeals themselves.

Ms Hanif for HMRC argued that Ms Adeosun (and therefore also NNN) received the letters and that there was no good reason for the delay. There were a number of facts that point towards her being aware of the notices:

Ms Harif noted that there had been a three-week delay between the date of the ADR meeting and the appeals being submitted. That was a further delay.

In our view, had either Ms Adeosun or Mr Pervez been aware of the notices then there could have been no good reason for the delay. The notices clearly stated what the recipient should do next and we do not accept Ms Adeosun’s argument that she thought they were part of the same matter as the VAT Appeals. The argument is therefore whether they received the notices and, if so, whether that amounted to a good reason for the delay.

Ms Adeosun’s evidence was that she did not receive the penalty and PLN notices. However, we find this to be at odds with other evidence. We accept HMRC’s evidence that they sent the notices to the correct addresses. Neither of the appellants have argued that they sought to change those addresses with HMRC. There was no evidence either directly or indirectly as to what Mr Pervez received or knew about the issue of the penalties. However, by virtue of Mr Auchterlonie’s e mail of 10 November 2022 and the conversation with Mr Auchterlonie the following day, he was on notice that HMRC were considering issuing penalties and a PLN.

Overall, we find that that the cause of the delay is a collective failure by NNN, Ms Adeosun and their accountant Mr Pervez to manage the tax investigation. Ms Adeosun and Mr Pervez were aware of the investigation and Mr Pervez was aware from 10 November 2022 that penalties and an APN were being considered by HMRC. Ms Adeosun and Mr Pervez should have put in measures to ensure that all correspondence, whether sent to Mr Pervez or the appellants, was received and acted on. However, that does not seem to have happened, indeed in March 2023 Mr Pervez told Mr Autherlonie that he has not heard from his client for a couple of months and was not sure he was still instructed. We find there is no good reason for the delay.