TC09572 - [2025] UKFTT 00850 (TC)

The Appellant was assisted by Mr Bentley who had provided the Tribunal with a witness statement. The document was contained in the document bundle and no challenge to it was made by the Respondents. That said, we noted that its content could more properly be described as submissions and, to the extent that it is appropriate, we have treated it as such.

Mr Stoney’s returns were submitted in his name without his knowledge or authority with the relief payment being sent to a third party. The Respondents confirmed that registration for Self-Assessment appeared to made for the purposes of claiming expenses, however EIS relief was then claimed.

Despite requesting help on a number of occasions, Mr Stoney was never provided with advice on how to appeal but rather was directed towards repaying the sums he had never received and setting up a payment plan which he understood was the only option available to him.

The delay in making an appeal to HMRC, and subsequently to the Tribunal, was due to a number of factors. Mr Stoney had changed address due to his mother’s health problems. That combined with his lack of understanding led to delay.

It is submitted that the prejudice of a financial burden to the Appellant arising from fraud outweighs that to HMRC in litigating a matter they believed had come to an end. It is in the interests of justice to allow the application.

Although not binding on the Tribunal, other cases such as Huntly (see [38]), Mccumisky v HMRC [2022] UKFTT 00128 (TC), Cormack v HMRC [2021] UKFTT 0355 (TC) and Robson v HMRC [2023] UKFTT 00226 (TC) involved similar issues where each Appellant had been the victim of fraud in similar circumstances and the Tribunal should take these cases into account given the link between the fraudulent agent in those cases and the Appellant’s.

The reasons set out in Mr Stoney’s Notice of Appeal can be summarised as follows. The Appellant is not a sophisticated taxpayer. He has always been PAYE and the returns were submitted fraudulently without his knowledge or authorisation. Mr Stoney confirmed to us at the hearing that he had worked in a factory for 15 years and had no experience of the Self-Assessment regime.

Mr Stoney advised the Respondents that he struggles with reading and writing and that he did not fully understand the information on the Closure Notices or correspondence sent to him. He called the Respondents a number of times to seek help and accepted a payment plan as he understood it was the only way to resolve the problem as he was told he was responsible for the returns. Mr Stoney confirmed to us in the hearing that his appeal rights were not explained, and he understood the Respondent’s decision to be final.

Mr Stoney did not know the specifics of the case against him or how to structure an appeal. The company to which the repayment was made was dissolved during the relevant period and the Respondents failed to make checks on the companies to which the monies were repaid.

Mr Bentley confirmed to us that the SAR and appeal to the Tribunal were made by him on Mr Stoney’s behalf and he reiterated that Mr Stoney was not a sophisticated taxpayer who had no understanding of the case against him which led to Mr Bentley’s involvement and assistance.

Mr Bentley submitted that, applying Martland, the delay is mitigated in the context of Mr Stoney’s lack of understanding. Balancing the prejudice to HMRC against a strong case and Mr Stoney not having the opportunity to have his appeal heard, it is in the interests of justice and fairness to allow the application.