TC09652 - [2025] UKFTT 01187 (TC)

Fecha: 09-Jul-2025

parties arguments

parties arguments

38.

Ms Hill submitted the following in support of the application:

(1)

The Appellant accepts that the appeal was late;

(2)

Appeal relates not only to the penalty for failure to notify but to the underlying substantive assessment as well;

(3)

The lateness was primarily caused by the fact that they had not received any of the post delivered to WWL from HMRC;

(4)

The first they knew about any ongoing issues to do with EOTHOS or other penalties was when they received the letter regarding being published as a deliberate tax defaulter;

(5)

They had sent the information in January 2022 and thought that everything was resolved;

(6)

The pub had closed in January 2023 for refurbishment as the pub was making losses and they needed to make changes;

(7)

They did not ignore correspondence from HMRC;

(8)

They had continued to comply with other issues such as VAT and PAYE during this period using the online account but had not seen anything there related to EOTHOS so were not aware that there was a problem.

39.

HMRC submits that:

(1)

The length of the delay was serious and significant for the majority of matters under appeal:

(a)

For the Schedule 36 penalty, being from 1 July 2022 to 14 November 2023, being over 18 months;

(b)

For the EOTHOS assessment, from 30 September 2022 to 14 November 2023, being 15 months;

(c)

For the failure to notify penalty, from 17 March 2023 to 14 November 2023, being just under 8 months;

(d)

For the late payment penalties:

(i)

Just under a year for the initial late payment penalty, from 7 December to 14 November 2023;

(ii)

Just over 6 months for the 6 month late payment penalty, from 5 May 2023 to 14 November 2023;

(iii)

10 days for the 12 month late payment penalty, from 4 November to 14 November 2023.

(2)

The reasons provided by the Appellant are insufficient to justify the delay of between 6 and 18 months and have not been proven, in particular:

(a)

No record of post returned undelivered to the relevant address;

(b)

All post was sent to the same address throughout and some letters, in particular were clearly received because WWL responded to them, in particular the letter dated 20 December 2021 and that dated 21 November 2023;

(c)

If a business closes its premises, it is required to put in place a re-direct system or provide HMRC with a different address for correspondence;

(d)

The closure occurred from January 2023 whereas most of the letters in question were issued in 2022;

(e)

Assuming a compliance check was closed without any further correspondence from HMRC is not a reasonable course of action;

(f)

HMRC did not receive the information WWL claim to have sent in early 2022 and WWL have been inconsistent about this submission:

(i)

The initial appeal sent to HMRC, WWL stated that it was sent in January 2022

(ii)

When the covering letter was forwarded to HMRC in November 2023, the attachments were not included and the letter was dated 2 February 2022;

(iii)

Notes of a phone call between HMRC and WWL on 24 February 2022 noted that Ms Hill had been absent from COVID and extended the deadline for submission of the information, which casts doubt on the assertion that it had already been submitted in either January or earlier in February;

(g)

HMRC could not correspond by email because WWL did not complete the email protocol requested in January 2022;

(3)

In assessing all the circumstances of the case, HMRC submit that:

(a)

WWL has shown repeated failures to comply with deadlines from the beginning of the compliance check and has shown consistent lack of diligence in their tax affairs, despite being aware of the deadlines;

(b)

To allow the late appeal would require HMRC to divert resources to defend an appeal that they were entitled to consider was closed.

(c)

WWL has, in the same period, been able to submit its corporation tax returns on time and entered into a time to pay arrangement to address their VAT debt; therefore they should have been in a position to bring an appeal to HMRC, which is relatively straightforward;

(d)

The real reason they are now trying to bring an appeal late is because the deliberate tax defaulters publication has become a possibility;

(e)

Allowing a late appeal in this instance is inconsistent with the principles of good administration of justice which require litigation to be conducted efficiently and at proportionate cost;

(f)

While HMRC note that a detailed assessment of the merits of the underlying case is not necessary, their view is that the substantive appeal is weak because no evidence had been submitted to support their challenge to the assessment for overclaimed EOTHOS.