TC09601 - [2025] UKFTT 00920 (TC)

As can be seen from paragraph 44(3) of Martland (see paragraph 14 above), we must then move to the third stage of Martland and balance the reasons given for the delay and the prejudice that would be caused to the parties by granting or refusing permission.

It is helpful to look at further relevant quotations from Martland and those read:

“45.

That balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected…The FTT's role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist.

46.

In doing so, the FTT can have regard to any obvious strength or weakness of the applicant’s case; this goes to the question of prejudice – there is obviously much greater prejudice for an applicant to lose the opportunity of putting forward a really strong case than a very weak one. It is important however that this should not descend into a detailed analysis of the underlying merits of the appeal… To that limited extent, an applicant should be afforded the opportunity to persuade the FTT that the merits of the appeal are on the face of it overwhelmingly in his/her favour and the respondents the corresponding opportunity to point out the weakness of the applicant’s case. In considering this point, the FTT should be very wary of taking into account evidence which is in dispute and should not do so unless there are exceptional circumstances.

47.

Shortage of funds (and consequent inability to instruct a professional adviser) should not, of itself, generally carry any weight in the FTT’s consideration of the reasonableness of the applicant’s explanation of the delay… Nor should the fact that the applicant is self-represented – Moore-Bick LJ went on to say (at [44]) that “being a litigant in person with no previous experience of legal proceedings is not a good reason for failing to comply with the rules”; HMRC’s appealable decisions generally include a statement of the relevant appeal rights in reasonably plain English and it is not a complicated process to notify an appeal to the FTT, even for a litigant in person.”

As can be seen from paragraph 45 of Martland we must take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected.

In relation to prejudice, Mr Hackett contended that an appeal of the PLN had merit and Ms Man argued that the case was very weak. The appellant’s total lack of co-operation with HMRC and his failure to provide any information beyond what is contained in the June Letter does not assist him.

As Ms Man pointed out, the Company had failed to account for NICs before Covid, receipts continued to rise and significant CJRS payments had been claimed and that was all in a period when the appellant was the only director and controlled the company.

We do not accept that, even if proved, his argument in the June Letter that “I have not benefitted at all personally from this business” and thus he could not be personally liable would assist him in an appeal. The test is one of neglect. His other argument in regard to the decisions as to whom the company paid, or did not, were not made by him “as I am not qualified to do so… I was not aware of what was required of me in terms of HMRC payments” not only do not assist but infer a lack of knowledge of his statutory obligations and thus possible neglect.

We are unable to form a definitive view on the weakness of the appellant’s appeal without hearing and evaluating the evidence and arguments which would be inappropriate in an application for permission to make a late appeal. It is clear that there are major gaps and, therefore, areas of potential weakness in the evidence.

As the Upper Tribunal cautioned in Martland, we should be very wary of taking into account evidence which is in dispute and it would not be appropriate to do so in this case without hearing detailed evidence on the point and giving HMRC an opportunity to challenge it.

It is certainly not clear to us that the appellant’s case has merits that are overwhelmingly in his favour. However, in the absence of any evidence about the failure to pay the NICs we cannot determine whether HMRC are correct in saying that the case for the appellant would be very weak.

Of course, the appellant will be prejudiced if we refuse to grant him permission to notify the appeal late in that he will have lost his opportunity to contest the PLN and will be liable to pay a substantial sum of money or indeed be made bankrupt. That, however, is a consequence of the failure to notify the appeal in time or in response to the subsequent letters stating that there was no appeal. It cannot be right that a delay which is significant and for which there was no good reason should be overlooked simply because the amount at stake is very large or significant to the would-be appellant. If that were so, there would be no point in having the same statutory time limit for notifying high value appeals and appeals of lower value by poorer taxpayers.

Against that prejudice to the appellant, we balance the prejudice to HMRC and the public interest if the appeals are allowed to proceed after such a long period of delay and the need for statutory time limits to be respected.

We find that the appellant has not given a sufficiently good reason for a serious and significant delay in appealing the PLN in circumstances where he was repeatedly told that no appeal had been lodged with HMRC and, in all the circumstances, it is not appropriate to give permission for the appellant to make a late appeal in this case.