TC09523 - [2025] UKFTT 00544 (TC)

In balancing the merits of the reasons given for the delay and the prejudice which would be caused to both parties by granting or refusing permission, we find that the reasons for the delay have very little, if any, merit but accept that the prejudice to the Appellants is significant given the amount involved.

We also must consider the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected to bring finality as set out in Martland.

As referred to in Smith v Brough, we need to take account of the public interest in the finality of litigation and the interests of the Respondents in addition to those of the Appellant. Compliance with time limits is expected and the Appellant has provided no good reason or reasons why he did not comply.

VP did not require the services of a lawyer to make an appeal within the 28 day period when he had both received the Unless Order of 19 December 2023 and the Strike Out Order of 15 January 2024. He was professionally represented by his accountant, RS, and discussed the Strike Out Order with him. Nevertheless, no action was taken to make an appeal until 28 March 2024 which was 46 days late.

Whereas there is prejudice to the Appellant in that he will not be able to challenge the assessment, the Respondents’ submissions on the strength or weakness of VP’s case was that VP’s case was weakened as he had contradicted his written evidence and cited the instance when VP stated he was unable to attend the matter before the tribunal hearing but was conducting litigation in the Court of Session. Counsel for the Appellant thought VP’s case was “not hopeless” and that the quantum of the assessment may be greatly affected by his bankruptcy in 2010.

Taking these submissions into account, to the extent we are required to, and weighing them in the balance, we do not consider that VP has a strong case.

We have taken into account the medical reports that were submitted as referred to in the chronology of this case which we were provided with and more recently but in relation to the issue of the appeal being late we are not, however, persuaded that VP’s medical condition would have prevented an appeal being lodged in time. Although it might have prevented him giving evidence, that task would be some time off after intimating an in-time appeal.

We have also taken into account that previously VP had engaged in a Court of Session action when stating that he could not issue instructions in relation to a matter before the Tribunal and that he was subject to an Unless Order in 2022 and so had previous experience of such an order.

There was no evidence provided by VP to substantiate his written statement that his accountants were at fault and responsible for the failure to appeal in time. In any event, his accountants, as professional advisers, had received the Strike Out Order and should have been aware of the consequences of not making an in-time appeal.

We do not find it convincing that VP could not recall when he had instructed RS to make the appeal which was initially confirmed by email on 28 March 2024 nor the specific reasons for doing so when he previously did not do so following his receipt of, and discussion with RS about, the Strike Out Order.

The investigation against tax fraud, which started this process was issued in April 2014 which is over 9 years ago. Almost 8 years ago his accountant prepared a Disclosure Report and in 2017 an assessment was issued and an appeal commenced in 2018, almost seven years ago

The emails to VP from MBS indicate that the preparation for an appeal against the assessment was far from being ready in December 2023, including the fact that there are no accounts with which to dispute the Disclosure Report and the information HMRC have taken from VP’s bank statements, and no proposals were put to us that, since that date, there has been any change in that position.

Permission for a late appeal should not, in terms of Martland, be granted unless we are satisfied on balance that it should be. We are required to take into account the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders.

We have found that there is no good reason or reasons for the delay and that the length of delay is serious.

As regards all the other circumstances, we find that they are not such as to persuade us to grant permission, once we take into account the particular importance of the need for statutory time limits to be respected in the context of a case which we do not consider is strong, and even since June 2020 is nearly 5 years in length with no case preparation having been completed or progressed and given the absence of any good reasons for delay in making an in-time appeal.

Accordingly, for the reasons stated the Time Limit application is refused

As we have refused the Time Limit application we are not required to consider the Reinstatement application but consider it appropriate to do so.

We refuse the Reinstatement application, substantially, for the reasons set out in relation to the Time Limit application.

We consider that the prejudice to the Appellant is outweighed by the prejudice to the Respondents and to the public interest.

We do not believe, to the extent that we are required to do so, that, when placed on the scales, that VP has a strong case particularly in view of the concerns raised by MBS who were attempting to act on his behalf and who considered that VP had ‘shown a complete reluctance to provide any co-operation’, the absence of accounts which were considered important for the appeal and the lack of veracity of VP’s evidence.

The correspondence from MBS also shows that despite the appeal being originally scheduled for a hearing in December 2021, VP’s case was far from being in a state to progress to such a hearing three years later.

Taking all these factors together in light of the Tribunal’s overriding objective, we consider that there was a serious failure in not appealing the “draconian remedy” of the strike out, clearly explained in terms of the Strike Out Order which was sent to both VP and his professional adviser and that there are no good reasons why the failure to appeal on time occurred. As set out above, having evaluated all the circumstances of the case we find that the appeal should not be reinstated.