TC09561 - [2025] UKFTT 00761 (TC)

Since this was an appeal against a refusal to review a decision to charge a penalty, the applicable law is s14 and s14A Finance Act 1994. These provide as follows.

Section 14(2):

“(2)

Any person who is (a) a person whose liability to pay any relevant duty or penalty is determined by, results from or is or will be affected by any decision to which this section applies, (b) a person in relation to whom, or on whose application, such a decision has been made, or (c) a person on or to whom the conditions, limitations, restrictions, prohibitions or other requirements to which such a decision relates are or are to be imposed or applied, may by notice in writing to the Commissioners require them to review that decision.”

Section 14(3) defines the time limit for requesting a review as follows:

“The Commissioners shall not be required under this section to review any decision unless the notice requiring the review is given before the end of the period of 45 days beginning with the day on which written notification of the decision, or of the assessment containing the decision, was first given to the person requiring review”.

Section 14(4) provides:

“…it shall be the duty of the Commissioners to give written notification of any decision to which this section applies to any person who (a) requests such a notification; (b) has not previously been given written notification of that decision; and (c) if given such a notification, will be entitled to require a review of the decision under this section.”

Section 14A [Review out of time] provides:

“(1)

This section applies if (a) a person may, under section 14(2), require HMRC to review a decision, and (b) the person gives notice requiring such a review after the end of the 45 day period mentioned in section 14(3).

(2)

HMRC are required to carry out a review of the decision in either of the following cases.

(3)

The first case is where HMRC are satisfied that (a) there was a reasonable excuse for not giving notice requiring a review before the end of that 45 day period, and (b) the notice given after the end of that period was given without unreasonable delay after that excuse ceased.

(4)

The second case is where (a) HMRC are not satisfied as mentioned in subsection (3), and (b) the appeal tribunal, on application made by the person, orders HMRC to carry out a review.”

We were presented with two alternative tests as to what was the right approach to determine whether to grant this application. The first being the “reasonable excuse” test and the second being the “relief from sanctions” (“Martland”) test. We concluded that we agreed with Judge Popplewell’s reasons and conclusion in paragraph 28 of SC Duvenbeck Logistik SRL v The Director of Border Revenue [2021] UKFTT 319 (TC) that our jurisdiction is appellate and that we are not restricted to considering only reasonable excuse when deciding whether or not DRB should be ordered to carry out a review out of time. Instead, the three-stage test in Martland v HMRC [2018] UKUT 178 (TCC) should be applied. Neither party disagreed that this was the correct test. The Martland test is to:

In case we were wrong about the correct test being the Martland test, we also considered the alternative test being in summary that we should consider only whether Mr Rahman had a reasonable excuse for failing to meet the 45 day deadline and gave notice after the end of that period without unreasonable delay after that excuse ceased.

Applying the Martland approach, our consideration was a follows.