TC09523 - [2025] UKFTT 00544 (TC)

The reason the appeal was struck out was a failure to comply with the Unless Order: specifically, the failure to comply with the requirements in that order that, by noon on 8th January 2024, VP should send to the Tribunal and to the Office of the Advocate General confirmation of whether he intended to proceed with the appeal, and, if he did so intend, whether he was represented and, if he was represented, by whom.

Strike-out is a draconian remedy and should be used only as a matter of last resort: HMRC v. BMW Shipping Agents Limited [2021] S.T.C. 1020, at [56 ] per the Upper Tribunal. In that passage, the Upper Tribunal emphasised:

None the less, VP recognises that in the context of this application too, the three-stage test of (i) identifying the seriousness of the failure, (ii) ascertaining why the failure occurred (including what facts VP has proved in that regard, and then (iii) evaluating all the circumstances of the case to determine whether the appeal should be reinstated, is the appropriate approach for the Tribunal to adopt.

VP’s previous solicitors withdrew from acting on 11th December 2023.

On 18th December 2023, VP was admitted to hospital. This was because of influenza A and pneumonia. He remained there for three days.

While VP was in hospital (of course unbeknown to the Respondents), by e-mail dated 19th December 2023, the Respondents requested a case management hearing to be held in advance of the due date for the Statement of Agreed Facts and Issues, which was 29th December 2023.

The purposes of the hearing would be to ascertain whether VP wished to continue with his appeal, whether he wished to instruct new agents, and whether a new date for the Statement of Agreed Facts and Issues should be fixed.

On 19 December 2023, the Tribunal issued the Unless Order requiring VP to state whether he intended to continue to proceed with his appeal, and, if he did so intend, to identify his agents, if any. It was sent to VP’s home address, provided to the Tribunal by the Respondents.

It is clear that, from 18th December 2023 onwards, the Respondents knew that VP was being represented by ABC Accountants, per Mr Singh, and that VP still contested various aspects of the assessments in dispute.

On 19th December 2023 (in which HMRC refer to an e-mail from ABC of the previous day referring to areas in dispute) and continuing through 8th February 2024, 21st February 2024, 8th March 2024, and 28th March 2024, this last being the date on which the present application was made. Thus, it is not a case where VP acted in a way to give the Respondents the impression that the matters were no longer in dispute.  

Although the Respondents thus knew that matters remained in dispute, that VP was represented and that the representative was RS of ABC, the Tribunal was not advised of this.

The question is whether, in these circumstances, the appeal should be reinstated?

It is of course a serious matter to fail to comply with an Unless Order. In the present context, the particular importance is that (i) the Tribunal was left unaware that VP wished to continue the appeal, and of his representation, and (ii) the Respondents were left unaware that he wished to continue his appeal, albeit they knew that VP still wished to dispute certain aspects of the assessments.

VP instructed his accountants to negotiate with HMRC while he was trying to find a solicitor during the period when the appeal could be made within the 28 day period but it is not clear when the instruction was given to ABC to send their email of 28 March 2024 making the application. He did however make the application on 28 March 2024 making it clear he wished to appeal the assessment and find a solicitor.

The case is important for VP as it relates to an assessment of potentially over £1 million which is a significant amount of tax for an individual and during his accountants negotiations with HMRC it is clear that he continues to dispute the quantum of the assessments.

A reason for failure to comply was VP’s ill-health for at least some of the material time. VP was in hospital until 21 December 2023. He is not clear about what happened and in particular about how and when he instructed ABC to make the appeal.

The Appellant says that the merits of his case are “not hopeless” and one particular issue is whether the fact of VP’s bankruptcy in 2010 has a significant effect on the assessable period and the quantum assessed.

It is submitted that, in all the circumstances, this is a case where it is appropriate to grant relief from the strike out order. There will be considerable prejudice to VP if he cannot appeal against the assessments if reinstatement is not allowed notwithstanding the evidence of the witness in relation to dates and actions on those dates. It is accepted that the appeal has taken a long time to date, and that the tax at stake goes back to 2000-2001.

It is accepted that part of the reason for this has been delay caused by VP, albeit to an extent the reason has been his ill-health. None the less, in the context of the amount at stake, the Respondents’ knowledge that aspects of the assessments remained in dispute, and the Respondents’ knowledge that, at the time of the Unless Order, VP was represented by ABC, it is submitted that the Tribunal should allow re-instatement which would be a proportionate.