UT (Tax & Chancery) UT/ xx /20 xx - [2025] UKUT 00255 (TCC)

A necessary starting point

Grounds 1, 2 and 3 are all concerned with the manner in which contentious matters before the FTT were considered and resolved. Grounds 1 and 2 allege a substantive failure to consider matters relevant to the FTT’s discretion on whether to extend time. Ground 3 concerns the alleged absence of reasoning in the Decision. All three Grounds require a consideration of the Decision.

The Decision was not published by the FTT. We understand this was because of sensitivity about Mr Ruprai’s ill-health, which was a factor raised in the applications to extend time and referred to in the Decision. We have sought to ensure that relevant findings of the FTT described in this decision can be understood without the need to annex a copy of the Decision.

It is helpful at the outset to set out in full the FTT’s reasoning at the end of the Decision which appeared under a heading “Decisions and Reasons”. This includes the FTT’s decision on the strike out applications which are not under appeal. We include those paragraphs because the circumstances in which the FTT refused HMRC’s applications to strike out are relevant to an understanding of the Decision as a whole:

“[110] HMRC has applied to strike out Medpro appeal TC/2021/19779. The grounds of appeal as stated in the Notice of appeal dated 23 December 2021 are:

“An assessment and subsequent review has not correctly considered that there was no product supply upon which VAT has been accounted and paid. The interpretations have all been based on the basis of the VAT 4 year rule. HMRC has been provided details of this and so there is no option to let the tribunal decide.”

[111] Following the judgment in Fairford Group plc quoted in paragraph 29 above I must avoid conducting a ‘mini’ trial but I should also consider the five principles set out in Easyair Ltd (t/a Openair) v. Opal Telecom Ltd quoted at paragraph 29 above.

[112] Mr Windle, on behalf of Medpro has put forward an argument adopted by the Court of Appeal in Brunel Motor Company (in administrative receivership) v. HMRC that Article 90 of the Principle VAT Directive allows for cancellation of a supply. This argument gives rise to my belief that “a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case”.

[113] I therefore refuse HMRC’s application to strike out Medpro appeal number TC/2021/19779 as there is an arguable case put forward by Mr Winkle (sic).

[114] HMRC issued a Notice of Penalty Assessment to Aver and the Aver PLN (Footnote: ⁷) to Mr Ruprai on 21 February 2022. A review of the Penalty Assessment was requested by Aver on 18 February 2022 but this request did not refer the Aver PLN. The review upheld the Penalty Assessment which was appealed by Aver to this tribunal within time on 20 April 2022.

[115] On 25 May 2022 HMRC wrote to Kishens [Mr Patel’s firm] to ask whether they required a review of the decision to issue the Aver PLN to Mr Ruprai. Kishens requested a review by return. The decision to uphold the Aver PLN was issued to Mr Ruprai with a copy to Kishens on 18 July 2022.

[116] HMRC issued a Statement of Case on 7 September 2022 which included the following:

“At the time of this Statement of Case, it is unknown if KR has appealed the Respondents’ PLN decision.”

[117] HMRC also wrote to Kishens on 22 September 2022 asking whether it was intended to appeal the Aver PLN. In his witness statement Mr Parel (Footnote: ⁸) states:

“Unfortunately, however, this was overlooked”

and in his oral testimony to the Tribunal said it was “an oversight”.

[118] Mr Ruprai appealed the PLN decision to this Tribunal on 26 October 2022 which was 70 days late. Applying the three stage test set out in Martland I consider the delay of 70 days to be serious and significant and the reason for the delay to be negligent (sic). Adopting the decision in Katib at paragraph 54:

“54…failures by a litigant’s adviser should generally be treated as failures by the litigant.”

[119] Although Mr Ruprai provided sick notes covering much of the period between April 2021 and August 2022 he had instructed Kishens to deal with HMRC on his behalf. In assessing the reasons for the late appeal I find it unacceptable that a professional adviser should overlook the possibility of an appeal, especially so after Kishens was asked on more than one occasion whether it was going to appeal the Aver PLN. Accordingly I refuse Medpro’s application for permission to bring a late appeal (TC/2022/13237).

[120] It was agreed by both parties that Medpro’s application for permission to bring a late appeal (TC/2022/13510 and Mr Ruprai’s application (TC/2022/13511) would stand or fall together as there was no evidence to distinguish between them. For similar reasons to those outlined in paragraph 119 I refuse both Medpro’s application and Mr Ruprai’s application for permission to bring late appeals (TC/2022/13510 and TC/2022/13511). The delay in bringing these two appeals is even longer than the delay in respect of the appeal in TC/2022/13237.

[121] I consider Medpro has an arguable case under Ground 1 of appeal TC/2022/13510. Thus if my decision to refuse permission for Medpro to appeal is overturned on appeal, I refuse HMRC’s application to strike out Ground 1. This accords with principle: it would be surprising and contrary to principle if Medpro and Mr Ruprai were in a worse position with regards to the penalties because of Mr Ruprai’s commendable decision to pay tax that they had a good argument HMRC was too late to collect.

[122] In summary:

(1)

HMRC’s application to strike out Medpro’s appeal TC/2021/19779 is refused.

(2)

I refuse Mr Ruprai’s application for permission to bring a late appeal TC/2022/13237.

(3)

I refuse Medpro’s application for permission to bring a late appeal TC/2022/13511;

(4)

I refuse Mr Ruprai’s application for permission to bring a late appeal TC/2022/13511; and

(5)

If I am overturned on appeal in respect of my decision to refuse permission for Medpro to bring a late appeal, I refuse HMRC’s application to strike out Ground 1 of Medpro’s appeal.”