UT/2024/000022 - [2025] UKUT 00309 (TCC)

Mr McNall, who made submissions on behalf of the Appellant on this ground, argued that the FTT erred at Stage 3 by failing to direct itself correctly in relation to the principles set out in Katib regarding whether a litigant should be fixed with the failings of their adviser.

While it is acknowledged the FTT referred to [54] of Katib (when setting out HMRC’s submissions) to the effect 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”, it was argued that the FTT dealt with the issue in a “pastiche” way and did not acknowledge that exceptions to the general rule were possible (such as being misled by advisers - whether that be by commission or omission). The ultimate question was whether it is fair and just to impose on a litigant the failings of their adviser.

Mr McNall thus argued the FTT had made errors of principle, leading to the omission to consider a material factor. On the facts here it was unfair to visit the adviser’s failings on Mr Pawar. Regarding such failings, Mr McNall highlighted how, for instance, Mr Mann had wrongly expected the next step to come from HMRC. That was based on a statement towards the end of the review decision letter that responsibility for the matter had reverted back to a named HMRC office but had completely overlooked the concluding paragraph of the letter which made clear that if HMRC’s conclusion was not agreed then an appeal could be made to the tribunal. The letter had also specified the 30 day deadline and the consequence that the tribunal might otherwise reject the appeal. Mr Mann had thus misunderstood the import of needing to notify the appeal within the relevant deadline. That was an extremely serious failing for someone instructed to represent a taxpayer. Unlike in Katib, Mr McNall submitted there were no “warning signs” regarding Mr Mann’s competence and Mr Mann was said to have behaved as one would expect a representative to behave. Mr Mann’s engagement (with HMRC as opposed to the FTT) was consistent with Mr Pawar’s understanding that a “way forward” had been agreed in principle. Mr McNall also drew attention to the FTT’s acceptance that if Mr Pawar had been advised of the appeal deadline no doubt an appeal would have been notified.

To the extent the rule was justified by an assumption that the litigant had a remedy in damages, Mr McNall’s submissions were that a negligence claim against Mr Mann would be of little value (Mr Mann, he suggested, was a “man of straw”) and would also be irrelevant to the prejudice suffered.