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

The law regarding extensions of time

In each case, the FTT refused the Appellants (as we shall refer to Mr Ruprai and Medpro collectively) permission to bring an appeal out of time. The Value Added Tax Act 1994 (VATA) contains various time-limits within which appeals against HMRC decisions must be brought. For present purposes, the relevant provision is section 83G VATA. The time limit is generally 30 days from the date of the decision being challenged or from the conclusion of a statutory review of that decision. Section 83G(6) provides that the tribunal can extend time:

“An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if the tribunal gives permission to do so.”

Two points need to be stressed:

In Martland v. HMRC, (Footnote: ¹) the Upper Tribunal articulated the following approach when considering applications for permission to appeal out of time. It is appropriate to set out the relevant paragraphs in full:

“[44] When the FTT is considering applications for permission to appeal out of time, therefore, it must be remembered that the starting point is that permission should not be granted unless the FTT is satisfied on balance that it should be. In considering that question, we consider the FTT can usefully follow the three-stage process set out in Denton: (Footnote: ²)

(1)

Establish the length of the delay. If it was very short (which would, in the absence of unusual circumstances, equate to the breach being “neither serious nor significant”), then the FTT “is unlikely to need to spend much time on the second and third stages” – though this should not be taken to mean that applications can be granted for very short delays without even moving on to a consideration of those stages.

(2)

The reason (or reasons) why the default occurred should be established.

(3)

The FTT can then move onto its evaluation of “all the circumstances of the case”. This will involve a balancing exercise which will essentially assess the merits of all the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission.

[45] That balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected. By approaching matters in this way, it can readily be seen that, to the extent they are relevant in the circumstances of the particular case, all the factors raised in Aberdeen and Data Select (Footnote: ³) will be covered, without the need to refer back explicitly to those cases and attempt to structure the FTT’s deliberations artificially by reference to those factors. The FTT’s role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist.”

At [46] of Martland, the Upper Tribunal considered the extent to which regard should be had to any obvious strength or weakness of the applicant’s case. It is unnecessary to consider this aspect of Martland any further.

In HMRC v. Katib, (Footnote: ⁴) the Upper Tribunal considered the relevance in the Martland analysis of failures by a taxpayer’s professional advisor or advisors. Katib applied the Martland three-stage consideration, and identified as a Stage 2 factor the fact that the taxpayer, as in the present appeal, had (i) retained a professional advisor who (ii) had fallen short and (iii) thereby failed to ensure that the taxpayer complied with the relevant time limits:

“[53] The first stage of the Martland examination can be addressed briefly. Mr Katib’s delay in appealing against the PLNs was, at the very least, 13½ months. That was “serious and significant”. The real question is how the second and third stages of the evaluation should be performed, having regard to the particular importance of statutory time limits being respected.

[54] 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. In Hytec Information Systems Ltd v. Coventry City Council, [1997] 1 WLR 1666, when considering the analogous question of whether a litigant’s case should be struck out for breach of an “unless” order that was said to be the fault of counsel rather than the litigant itself, Ward LJ said, at 1675:

Ordinarily this court should not distinguish between the litigant himself and his advisers. There are good reasons why the court should not: first, 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 (as Mr McGregor eloquently put it) 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.” (Emphasis added.)”'

…

[56] …we consider that the correct approach in this case is to start with the general rule that the failure of Mr Bridger 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. However, when considering the third stage of the evaluation required by Martland, we should recognise that exceptions to the general rule are possible and that, if Mr Katib was misled by his advisers, that is a relevant consideration.”

In Katib, the Upper Tribunal set aside the decision of the FTT because it had failed to give proper force to the importance of respecting statutory time limits. It went on to re-make the decision and found on the facts that the general rule was not displaced and that the adviser’s conduct did not carry much weight at Stage 3. (Footnote: ⁵)