![TC09601 - [2025] UKFTT 00920 (TC)](https://backend.juristeca.com/files/emisores/logo_7HSuEAV.png){kind=logo}
Debt Collection
Debt Collection
On 10 January 2024, Officer Barcroft wrote to the appellant to inform him that the debt of £231,723.42 was still outstanding and asked him to pay online or contact HMRC. He was warned that if he neither paid the debt nor contacted HMRC, HMRC might take action to collect the debt and that might include bankruptcy.
There was no response.
On 21 February 2024, Officer Barcroft wrote to the appellant again warning him that HMRC would be applying for a Bankruptcy Order if nothing was heard from him before 6 March 2024. That was sent by recorded mail and was signed for by the appellant on 22 February 2024.
On 6 March 2024, the appellant emailed Officer Barcroft, copied to Freeths, stating that he had contacted a solicitor and “I did not realise the severity of the matter and therefore I am requesting additional time to prepare a response. Please can you delay the next stage of your process whilst I confer with them”.
The officer offered an extension of time until 13 March 2024 and copied that email to Freeths.
On 13 March 2024, Freeths wrote to HMRC asking why HMRC had failed to reply to the June Letter, a copy of which was enclosed.
Freeths acknowledged that the appellant had:
received the letter of 22 October 2022,
been served with the PLN on 18 April 2023, and
been reissued with the PLN on 15 June 2023.
They summarised the June Letter as stating that:
There had been no neglect on the part of the appellant,
unforeseen factors such as Covid-19 had “led the business into financial difficulties”,
the appellant had delegated the financial management of the Company “to more qualified individuals” whilst he concentrated on operational management,
the appellant had sought help “when it became reasonable to do so” to prevent the Company incurring further liabilities and that had led to the voluntary liquidation.
They argued that the June Letter had been a valid appeal and yet HMRC had continued to “issue PLN warnings and threats of bankruptcy”.
On 14 March 2024, Officer Love responded confirming that neither the June Letter nor any other letter had been received from the appellant in relation to the enquiry. He narrated the history of the enquiry identifying all of the letters that he had issued and the lack of responses from the appellant.
He then addressed the June Letter pointing out that the only stated ground of appeal was that the decision was “grossly unfair and wrong” and there had been no reference to the four grounds of appeal specified in Section 121D SSAA 1992.
He explained that in his letter of 15 June 2023 he had identified those grounds of appeal. He pointed out that, notwithstanding the fact that the June Letter had not been received, nevertheless it was not a valid appeal as there was no reference to those statutory grounds of appeal.
He also made it clear that no explanation had been given for the failure to reply to the letters of 2 and 24 August 2023 which had both specifically stated that no appeal had been lodged with HMRC.
On 11 April 2024, Freeths responded stating that the June Letter, summarised as previously (see paragraph 46 above) set out a “number of valid reasons as to why the company could not pay the outstanding tax”.
It went on to comment on the officer’s arguments about the bank statements of the Company and the CJRS payments arguing that the failure to make payment of the NICs was not attributable to the appellant and that therefore the June Letter was a valid appeal. Their starting point was that the June Letter was a timeous appeal to HMRC.
They argued that if HMRC had followed their own guidance they should have accepted that the appellant had sent the June Letter to them because the appellant claimed that he had done so.
They concluded by stating:
“We would be grateful for HMRC to confirm that a late appeal may be accepted in the circumstances…”.
On 18 April 2024, Officer Love replied explaining again that there was no record of the June Letter ever having been received but that more pertinently (even if it had been) the contents of the letter did not constitute a valid appeal in terms of Section 121D SSAA 1992.
He pointed out that he had seen no explanation as to why the appellant had not responded:
to the letters of 2 and 24 August 2023 which had made it explicit that no appeal had been received, and
to the letter of 10 January 2024 threatening bankruptcy.
The application for a late appeal was rejected because:
The June Letter was not a valid appeal.
Freeth’s letter of 13 March 2024 was the first correspondence received by HMRC in which a valid ground of appeal was mentioned.
In August 2023, the appellant had been informed that no appeal had been received and the first contact from the appellant was on 6 March 2024 which was more than six months later; that was an unreasonable delay.
The letter included the following paragraphs:
“Application to tribunal
If you do not agree with HMRC’s decision to reject your clients late appeal you have the right to ask an independent tribunal to rule that HMRC must accept your late appeal. To do this you should write to the Tribunals Service. You can find out more about tribunals, including the appeal form, on the Tribunals Service website… or you can phone them on…
Further information
You can find further information about appeals and reviews on the HMRC website at…”.
On 22 April 2024, Freeths responded arguing that the June Letter had been a valid appeal.
The officer replied on the same day pointing out again that there was no letter of appeal dated 27 June 2023 and there was no other correspondence from the appellant in relation to the enquiry. Furthermore, the appellant had never responded to the letters of 2 and 24 August 2023 which had pointed out that no appeal had been received. The appellant had also failed to reply to Officer Barcroft’s first letter.
He explained that he had treated Freeths’ letter dated 13 March 2024 as a late appeal but that in the absence of a reasonable excuse for the late appeal, the late appeal was rejected. He again pointed out that an appeal could be made to the Tribunal in the same terms as we have narrated at paragraph 55 above.
On 24 April 2024, Freeths wrote to HMRC again advancing arguments about the June Letter. They concluded stating:
“The question here is not whether our letter dated 13 March 2024 should be allowed as a late appeal in respect of the PLN issued against Mr Lyon. Instead HMRC must conduct a review of the grounds on which a PLN was issued in response to Mr Lyon’s appeal dated 27 June 2023, and how the failure to pay in this instance can be attributable to serious neglect on the part of Mr Lyon.”.
On 26 April 2024, Officer Love replied explaining that there were no longer any rights of appeal with HMRC and again highlighted the right to appeal to the Tribunal whether in relation to the decision to reject the late appeal or in relation to the PLN.
On 1 May 2024, Freeths again wrote to HMRC arguing that the June Letter was valid.
On 3 May 2024, Officer Love responded pointing out that:
The first valid appeal of the PLN was Freeths’ letter of 13 March 2024.
If Freeths wished to maintain that the June Letter was a valid appeal then as previously advised the appellant could lodge an appeal with the Tribunal.
If Freeths were unable to satisfy a Tribunal that the June Letter was a valid appeal then the letter of 13 March 2024 would have to be the subject matter of an application to the Tribunal for a late appeal.
There were no further rights of appeal to HMRC.
On 13 May 2024, Freeths again wrote to HMRC arguing that the June Letter was a valid appeal and cited case law in support of their position arguing that “An appeal to the tribunal is not appropriate at this stage…”.
On 14 May 2024, Officer Love replied
Disagreeing with the arguments advanced in relation to case law.
Reiterating HMRC’s view that the June Letter was not a valid appeal.
The appellant’s only option, as previously intimated was to apply to the Tribunal claiming that the June Letter was a valid appeal and, in that event, as indicated in the letter of 27 June 2023, HMRC would apply for the appeal to be struck out; the Tribunal would then decide whether or not it was a valid appeal.
Explaining that any application to the Tribunal for a late appeal should state the outcome sought if the late appeal was allowed.
Declining to correspond further.
On 15 May 2024, Freeths wrote to the officer. Under the heading “Grounds of appeal” they advanced further arguments on the cases that they had previously cited. They also amplified their reliance on the June Letter highlighting that, in addition to having said that the PLN was “grossly unfair and wrong” the appellant had said:
“it is unreasonable to make me personally liable for a failed business” and
“I don’t see how I can be personally liable for HMRC payments when we’re trying to keep the business trading during difficult times”.
Their argument was that those quotations taken together with other arguments meant that the appellant was advancing the ground of appeal at Section 121D(2)(b) SSAA1992 ie there had been no fraud or neglect on his part. They reiterated other arguments about HMRC’s guidance and again stated that it was not appropriate to appeal to the Tribunal.