TC09630 - [2025] UKFTT 01071 (TC)

The reason for the delays was that Mr Cooke believed appeals had been made, at least in relation to the assessments and closure notices, and he told Mr Di Lellio this was the position. This can be seen from the following facts:

However, that belief was not only wrong, it was unreasonable. Mr Cooke had been repeatedly told by HMRC that no appeals had been made. In particular:

However, the Application has been made by Mr Di Lellio, not by Mr Cooke. Mr Di Lellio believed Mr Cooke’s repeated assertions that the assessments had been appealed. We considered whether Mr Di Lellio had a good reason for the exceedingly long delays in appealing the decisions, on the basis that he had relied on and trusted Mr Cooke.

In Hytec Information Systems v Coventry City Council [1997] WLR 666 (“Hytec”), the Court of Appeal considered a similar issue: whether a litigant’s case should be struck out for breach of an “unless” order that was said to be the fault of his barrister. Ward LJ, giving the leading judgment, said:

“Ordinarily this court should not distinguish between the litigant himself and his advisers. There are good reasons why the court should not: firstly, if anyone is to suffer for the failure of the solicitor it is better that it be the client than another party to the litigation; secondly, the disgruntled client may in appropriate cases have his remedies in damages or in respect of the wasted costs; thirdly, it seems to me that it would become a charter for the incompetent…were this court to allow almost impossible investigations in apportioning blame between solicitor and counsel on the one hand, or between themselves and their client on the other. The basis of the rule is that orders of the court must be observed and the court is entitled to expect that its officers and counsel who appear before it are more observant of that duty even than the litigant himself.”

In Katib v HMRC [2019] UKUT 189 (TCC) (“Katib”),the UT said at [49] (their emphasis):

“We accept HMRC’s general point that, in most cases, when the FTT is considering an application for permission to make a late appeal, failings by a litigant’s advisers should be regarded as failings of the litigant.”

The UT returned to the same issue at [54], saying:

“It is precisely because of the importance of complying with statutory time limits that, when considering applications for permission to make a late appeal, failures by a litigant’s adviser should generally be treated as failures by the litigant.”

The UT then cited the passage from Hytec set out above, and continued at [56] by concluding that the correct approach in Mr Katib’s case was:

“…to start with the general rule that the failure of Mr Bridger [Mr Katib’s adviser] to advise Mr Katib of the deadlines for making appeals, or to submit timely appeals on Mr Katib’s behalf, is unlikely to amount to a ‘good reason’ for missing those deadlines when considering the second stage of the evaluation required by Martland.”

This was followed by the following comment at [58]:

“…the core of Mr Katib’s complaint is that Mr Bridger was incompetent, did not give proper advice, failed to appeal on time and told Mr Katib that matters were in hand when they were not. In other words, he did not do his job. That core complaint is, unfortunately, not as uncommon as it should be. It may be that the nature of the incompetence is rather more striking, if not spectacular, than one normally sees, but that makes no difference in these circumstances. It cannot be the case that a greater degree of adviser incompetence improves one’s chances of an appeal, either by enabling the client to distance himself from the activity or otherwise.”

In deciding that little weight be given to Mr Katib’s reliance on his adviser, the UT also took into account that Mr Katib should have noticed “warning signs”, including direct contact from HMRC in the form of enforcement action, which “should have alerted him”, and they concluded Mr Katib was “not without responsibility in this story”.

In Uddin v HMRC [2023] UKUT 99 (TCC), the taxpayer similarly alleged that he had been misled by his adviser. The UT stated at [30] (our emphasis):

“…a client will always rely on their advisers, but their adviser’s failings are still laid at their door. 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 should therefore not normally find that a person’s reliance on his adviser provides a good reason for delay, unless that person can show he did what a reasonable taxpayer in his position would have done.

We considered whether the facts of Mr Di Lellio’s case took him outside that normal range on that basis. In doing so we took into account that:

We find that the reasonable taxpayer who had received those letters would have asked his accountant to show him a copy of the appeals which he had been told had been made, as well as copies of the related correspondence to which he had been referred by HMRC. Had Mr Di Lellio taken that step, it would have been clear to him that Mr Cooke had never filed an appeal.

However, we must consider the position of a reasonable taxpayer in Mr Di Lellio’s position. In October 2018, Mr Di Lellio was diagnosed with cancer, and on 11 December 2019, when he received the first bankruptcy warning letter, he asked HMRC to liaise with his accountants, because of the time and energy required to deal with the consequential medical treatment. However, we also took into account the following facts:

Taking into account the above, we find that Mr Di Lellio’s illness did not prevent him from asking Mr Cooke to show him the appeals he had made together with the correspondence to which he had been directed by HMRC. Had Mr Di Lellio taken that action when he received the detailed letter from Officer Fowler on 10 January 2020, he could have instructed Mr Cooke (or another practitioner) to make late appeals against all the assessments. Although still after the statutory 30 day time limit, the appeals would not have been so egregiously late. In other words, the reasonable person in Mr Di Lellio’s position would not have simply sat back and relied on his accountant. Instead, it was only during this hearing of the Application that Mr Sanders accepted on Mr Di Lellio’s behalf that no appeals had been filed. We therefore decided that this case could not be distinguished from the normal position where reliance on an adviser does not provide a good reason for delay.

The third stage in the Martland approach is to consider all the circumstances, and then to carry out a balancing exercise.