TC09602 - [2025] UKFTT 00930 (TC)

On 26 August 2022, HM Revenue & Customs (“HMRC”) issued Mr Gill with a Personal Liability Notice (“PLN”) of £1,825,818.08 for VAT periods 01/15 to 06/19 inclusive, on the basis that deliberate inaccuracies in VAT returns made by PS Gill Construction Ltd (“PSGCL”) were attributable to Mr Gill as an officer of that company.

That decision was upheld on statutory review, and on 2 December 2022, Mr Monk of TM Sterling Ltd (“TMS”), on behalf of Mr Gill, filed a Notice of Appeal with the Tribunal.

In accordance with Rule 11 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Tribunal Rules”), the Tribunal and HMRC therefore communicated only with TMS (and not with Mr Gill) and sent that firm multiple letters and emails. However, between 7 March 2023 and 13 January 2024, TMS did not respond to any of those many communications.

On 22 November 2023, Judge Bailey issued an “Unless Order”, directing that Mr Gill’s appeal be struck out unless by 6 December 2023, he complied with the direction to file witness evidence. No response was received and the appeal was struck out on 7 December 2023. In February 2024, HMRC wrote to Mr Gill saying he was now required to pay the £1,825,818.08. Mr Gill was “shocked” as he had not heard anything from TMS and had assumed the hearing had been delayed by a post-Covid backlog at the Tribunal.

On 13 February 2024, TMS filed a reinstatement application which relied on Mr Gill’s medical conditions. No evidence was filed about the reasons why TMS had failed to inform Mr Gill of the Tribunal’s directions, including the Unless Order.

Mr Monk of TMS attended the hearing to represent Mr Gill, but Mr Gill himself did not attend. Ms Goldring, who represented HMRC, rightly raised the question as to whether TMS were conflicted. I considered whether to adjourn the hearing to allow Mr Gill the opportunity to instruct new advisers, but for the reasons set out at §90 below, decided not to do so.

In deciding his application, I considered the relevant case law, in particular Martland v HMRC [2018] UKUT 0178 (TCC) (“Martland”), Katib v HMRC [2019] UKUT 189 (TCC) (“Katib”), and Uddin v HMRC [2023] UKUT 99 (TCC) (“Uddin”), In Katib, the Upper Tribunal (“UT”) held that “failures by a litigant’s adviser should generally be treated as failures by the litigant”. In Uddin, the UT held that:

“Why the adviser failed and how they led their client to continue to rely on them is not relevant to the Martland analysis, unless the client can show that they did whatever a reasonable taxpayer in that situation would have done (which would generally be to make sufficient efforts to keep tabs on the adviser and make sure that matters were on track).”

The Tribunal warned of the strike out on 6 October 2023; the Unless Order followed on 22 November 2023, and the appeal was struck out on 7 December 2023. On 2 October 2023, Mr Gill had been hospitalised with end-stage renal failure and in the same month, his wife was seriously injured in a car accident. In December 2023, Mr Gill was diagnosed with heart failure.

In my judgment, during the period from 6 October to 7 December 2023, the reasonable taxpayer in Mr Gill’s position would not be keeping tabs on his adviser to make sure the appeal was on track, as the UT put it in Uddin. He would be focused entirely on his life-threatening medical conditions and his wife’s health following the car accident. This was therefore a case where the failings of the adviser should not be laid at the door of the litigant. Having applied the case law and considered all relevant circumstances, I allow the reinstatement application.