[37]15.There are two conflicting decisions of the UT about the principles that are to be applied when non-compliance with rules and directions falls to be considered by a tax tribunal. The first in time is the decision of Judge Sinfield in McCarthy & Stone (Developments) Ltd v HMRC [2014] UKUT 197 (TCC) , [2014] STC 973 and the second is the decision of Judge Bishopp in Leeds City Council v HMRC [2014] UKUT 350 (TCC) where he declined to follow Judge Sinfield's approach. The Leeds decision was promulgated after Judge Mosedale's determination in this case and accordingly she could not have known of it. Judge Bishopp followed his earlier reasoning in Leeds in coming to the conclusion that the FtT in this case had erred in law. 16.The key question underlying the two decisions can be characterised in the following way: whether the stricter approach to compliance with rules and directions made under the CPR as set out in Mitchell v News Group Newspapers Ltd [2014] 1 WLR 795 and Denton v TH White Ltd [2014] 1 WLR 3926 applies to cases in the tax tribunals. The two conflicting decisions of the UT on the point came to different conclusions. For the reasons I shall explain, I am of the firm view that the stricter approach is the right approach. ……………………………………….. 37. There is nothing in the wording of the relevant rules that justifies either a different or particular approach in the tax tribunals of FtT and the UT to compliance or the efficient conduct of litigation at a proportionate cost. To put it plainly, there is nothing in the wording of the overriding objective of the tax tribunal rules that is inconsistent with the general legal policy described in Mitchell and Denton . As to that policy, I can detect no justification for a more relaxed approach to compliance with rules and directions in the tribunals and while I might commend the Civil Procedure Rules Committee for setting out the policy in such clear terms, it need hardly be said that the terms of the overriding objective in the tribunal rules likewise incorporate proportionality, cost and timeliness. It should not need to be said that a tribunal's orders, rules and practice directions are to be complied with in like manner to a court's. If it needs to be said, I have now said it.[38]A more relaxed approach to compliance in tribunals would run the risk that non-compliance with all orders including final orders would have to be tolerated on some rational basis. That is the wrong starting point. The correct starting point is compliance unless there is good reason to the contrary which should, where possible, be put in advance to the tribunal. The interests of justice are not just in terms of the effect on the parties in a particular case but also the impact of the non-compliance on the wider system including the time expended by the tribunal in getting HMRC to comply with a procedural obligation. Flexibility of process does not mean a shoddy attitude to delay or compliance by any party. 46. The Supreme Court approved this approach in its recent judgment, BPP Holdings Ltd v HMRC [2017] UKSC 55 at paragraphs 24 to 27 : 24. In this case, when considering the proper approach to the making of a debarring order in the Ft-T, the Ft-T, and indeed the UT, the Court of Appeal, and counsel before us, concentrated on recent English cases, particularly Mitchell and Denton, but also Durrant v Chief Constable of Avon and Somerset Constabulary (Practice Note) [2014] 1 WLR 4313 . These cases provide a salutary reminder as to the importance that is now attached in all courts and tribunals throughout the UK to observing rules in contentious proceedings generally, but they are directed to, and only strictly applicable to, the courts of England and Wales, save to the extent that the approach in those cases is adopted by the UT, or, even more, by the Court of Appeal when giving guidance to the Ft-T. 25. Such guidance to tribunals on tax cases was given by Judge Sinfield in the UT in McCarthy & Stone. In para 43, after referring to differences and similarities between the CPR and the tribunal rules, in that case the Tribunals Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698), he accepted that “the CPR do not apply to tribunals” but added that he did not “accept that the UT should adopt a different, ie more relaxed, approach to compliance with rules, directions and orders than the courts that are subject to the CPR”. The same view was expressed by Ryder LJ in paras 37 and 38 in the Court of Appeal in this case, including this: “I can detect no justification for a more relaxed approach to compliance with rules and directions in the tribunals”, and added that “[i]t should not need to be said that a tribunal’s orders, rules and practice directions are to be complied with in like manner to a court’s”. 26. It is not for this Court to interfere with the guidance given by the UT and the Court of Appeal as to the proper approach to be adopted by the Ft-T in relation to the lifting or imposing of sanctions for failure to comply with time limits (save in the very unlikely event of such guidance being wrong in law). We have twice recently affirmed a similar proposition in relation to the Court of Appeal’s role in relation to the proper approach to be taken in such cases by first instance judges - see Global Torch Ltd v Apex Global Management Ltd (No 2) [2014] 1 WLR 4495 and Thevarajah v Riordan [2016] 1 WLR 76 . The guidance given by Judge Sinfield in McCarthy & Stone was appropriate: as Mr Grodzinski QC, who appeared for BPP pointed out, it is “an important function” of the UT to develop guidance so as to achieve consistency in the Ft-T: see R (Jones) v First-tier Tribunal (Social Entitlement Chamber) [2013] 2 AC 48 , para 41, per Lord Carnwath. And, by confirming that guidance in this case, the Senior President, with the support of Moore-Bick V-P and Richards LJ, has very substantially reinforced its authority. In a nutshell, the cases on time-limits and sanctions in the CPR do not apply directly, but the Tribunals should generally follow a similar approach. 27. Such an approach was adopted by Judge Mosedale, as demonstrated by the passages in her judgment cited in paras 15 and 20 above. As Ryder LJ rightly said at para 32 of his judgment: “Judge Mosedale did not directly apply the CPR or the subsequent authorities that give guidance on CPR 3.9. She was careful to make it clear that her consideration of the same was limited to whether the guidance contained in them was relevant by analogy to the application of the overriding objective in the tax tribunal rules … Most importantly, she distinguished the guidance before applying a nuanced version of it to the overriding objective in the tax tribunal rules.” 47. Mr Justice Morgan referred to Rule 3 . 9 o f the C i vil Pro cedu r e Ru les ( “C P R”) at [37] of his judgment in Data Select . Rule 3.9 has s i nce been amen ded and now reads: “(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need–(a) for litigation to be conducted efficiently and at proportionate cost; and(b) to enforce compliance with rules, practice directions and orders.” 29. In R (oao Dinjan Hysaj) v SSHD [2014] EWCA Civ 1633 (“ Hysaj ”), Moore-Bick LJ, giving the judgment of the Court of Appeal, gave guidance on whether the merits of a substantive appeal should be considered in applications for extension of time. His Lordship stated at [46]: “If applications for extensions of time are allowed to develop into disputes about the merits of the substantive appeal, they will occupy a great deal of time and lead to the parties' incurring substantial costs. In most cases the merits of the appeal will have little to do with whether it is appropriate to grant an extension of time. Only in those cases where the court can see without much investigation that the grounds of appeal are either very strong or very weak will the merits have a significant part to play when it comes to balancing the various factors that have to be considered at stage three of the process. In most cases the court should decline to embark on an investigation of the merits and firmly discourage argument directed to them. Here too a robust exercise of the jurisdiction in relation to costs is appropriate in order to discourage those who would otherwise seek to impress the court with the strength of their cases.” 30. In Raymond Harvey v HMRC [2016] UKFTT 597 (TC) the First-Tier Tribunal in considering an application for permission to appeal out of time adopted the approach of using the structure and the criteria set down by Mr Justice Morgan in Data Select at paragraph 34 of that decision: As a general rule, when a court or tribunal is asked to extend a relevant time limit, the court or tribunal asks itself the following questions: (1) what is the purpose of the time limit? (2) how long was the delay? (3) is there a good explanation for the delay? (4) what will be the consequences for the parties of an extension of time? and (5) what will be the consequences for the parties of a refusal to extend time. The court or tribunal then makes its decision in the light of the answers to those questions. Summary of Discussion and Decision 48. The Tribunal adopts the approach of considering the Data Select questions in the context of the approach approved by the Supreme Court in BPP Holdings . Purpose of the time limit 49. The purpose of the time limit in which to bring an appeal is in pursuit of a clear public interest in the finality of the decisions of HMRC. Time limits enshrine the need to bring the conduct or prospect of litigation to a speedy conclusion. As time limits, whether imposed by statute, tribunal rule or tribunal directions, serve the public interest, compliance is normally to be expected. 50. In John O’Gaunt v HMRC TC/2014/04510, the Tribunal explained the purpose of such time limits at paragraph 21 of its decision: ‘ It is designed to provide certainty and it is not in the interest of justice to permit appeals after long periods of delay. There is a public interest in the finality of decisions of the commissioners .’ In North Berwick Golf Club [2015] UKFTT 82 (TC) at [33] the Tribunal stated ‘ time bar provisions are created for a reason and that is that they provide finality and certainty and that is not a matter that should be lightly disregarded ’. 51. Rule 2(2)(e) of the Tribunal Rules, part of the overriding objective, requires the tribunal to avoid delay so far as compatible with proper consideration of the issues. 52. In applying the law to the facts of this case, the purpose of the time limit in which to bring an appeal, is in pursuit of a clear public interest in the finality of decisions of HMRC. Time limits enshrine the need to bring the conduct or prospect of litigation to a speedy conclusion. Length of the delay 53. The length of the delay in this case before a notice of appeal was lodged by the appellant at the Tribunal on 16 October 2016, was lengthy on any analysis. 54. We have found the length of delay to be between ten and thirteen months from the decisions so that the appeals are between nine and twelve months late. 55. The Tribunal notes that the Upper Tribunal in Romasave (Property Services) Limited v Revenue and Customs Commissioners [2015] UKUT 254 (TCC) at paragraph 96 stated that ‘a delay of more than three months cannot be described as anything but serious and significant.’ It also notes that the Upper Tribunal in O’Flaherty v Revenue and Customs Commissioners [2013] UKUT 0161 (TCC) stated that permission to appeal out of time should only be granted exceptionally, meaning that it should be the exception rather than the rule and not granted routinely. Reasons for the delay - Good Explanation? 56. The principal reasons that the appellant and his agent rely upon for the delay in lodging an appeal are that: they were trying to avoid taking an appeal to the Tribunal; they sought to provide fresh information to HMRC in February and July 2016 following the reviews on 26 November 2015 and March 2016; and they waited for a reasonable period of time after July 2016 without any further reply from HMRC before lodging the appeal at the Tribunal. They had been expecting a reply from HMRC but none had been forthcoming. 57. We do not consider this to be a good explanation for the delays for the following reasons. 58. The appellant’s explanation does not give any good reason for the failure to appeal against the direct tax assessments issued on 14 September 2015 within a reasonable time. The first time these were appealed was on 16 October 2016, some twelve months late. No reference was made to them within any of the intervening correspondence and no request for HMRC review or appeal was made. The timescales and routes of appeal were made clear to the appellant at the time of the issuing of the assessments. There was no ambiguity in the course of action that should be taken and deadline for doing so. There is no explanation for the lack of appeal within a reasonable time following the issuing of the assessments. 59. Likewise, the appellant’s explanation does not give any good reason for the failure to appeal against the VAT penalty issued on 10 December 2015 within a reasonable time. The first time this was appealed was on 16 October 2016, some nine months late. No reference was made to it within any of the intervening correspondence and no request for HMRC review or appeal was made. The timescales and routes of appeal were made clear to the appellant at the time of the issuing of the penalty. There was no ambiguity in the course of action that should be taken and deadline for doing so. There is no explanation for the lack of appeal within a reasonable time following the issuing of the penalty. 60. In relation to the appeal against the review decision upholding the appellant’s registration for VAT, the VAT assessment itself not being appealable, the Tribunal has found that some of the correspondence from HMRC was not as helpful as it might have been. 61. While HMRC’s original decision of 23 September 2015 set out the route of appeal to the Tribunal and deadline for doing so, the review letter of 26 November 2015 did not do so but only referred to guidance. However, it is clear from the correspondence itself and Mr Patel’s submissions that he, and the appellant by implication, were aware of the route of appeal to the Tribunal. Indeed, they were seeking to avoid using this route if possible. In any event, the burden would be on the appellant to inform himself of the law on how to make an appeal and the applicable deadlines. This is all contained within HMRC’s published guidance. It was also contained within the original letter of 23 September 2015 and explained in the telephone call with Mr Patel on 16 October 2015. 62. The letter and email of HMRC Officer Richardson of 10 March 2016 and 18 July 2016 declined to conduct a re-review based upon the information provided. The correspondence advised Mr Patel to proceed with an appeal to the Tribunal. The communications were, to some extent, capable of confusing the appellant and Mr Patel as to the automatic availability of an appeal to the Tribunal. Both the letter and email made it clear that the original review decision was upheld, the new information had been considered and rejected and the proper course to challenge these decisions was to appeal to the Tribunal. However, in not stating that the deadline for appeal had already passed and that any application for appeal to the Tribunal would be out of time and require permission to proceed, they were capable of giving false comfort to Mr Patel and appellant that an appeal would automatically be accepted by the Tribunal. 63. However, most importantly, Mr Patel did not rely on any misapprehension or seek to suggest he was misled by the letter and email of Officer Richardson that the appellant was within time to make the appeals. There was no evidence from the appellant on this point or any other. Officer Richardson had at least made it clear that the proper course was to appeal to the Tribunal if his decisions were not accepted. Reading all the correspondence from HMRC as a whole from 23 September 2015 there could be no doubt about this. 64. We are then left to consider whether Mr Patel’s explanation, on behalf of the appellant, for the delays between 26 November 2015 and 8 February 2016; 10 March and 14 July 2016; & 18 July and 16 October 2016 were reasonable. Are they such that, taken individually and collectively, there is a good explanation for the delay? 65. The delay between 26 November 2015 and 8 February 2016 was over two months. It is said that during this time the appellant provided further information to Mr Patel on which he sought to challenge the review decision. This is a fairly long passage of time, albeit, on its own it might not be considered to be unreasonable if it were the only delay in the case. However, the review letter of 26 November 2015 did make clear that the review had concluded. Therefore, the appellant and his adviser should reasonably have been aware, based on guidance, that if seeking to provide fresh information to HMRC in support of a re-review, this should be done as quickly as possible thereafter. 66. The delay between HMRC’s letter of 10 March 2016 and 15 July 2016 is over four months. It is said that during this time Mr Patel and the appellant provided further information based on enquiries with Joanne Williams of BCA which supported the merits of this case. This could not be considered to be a reasonable period of time to wait for further information in the circumstances. Given the clear terms of the letter of 10 March 2016 that there would be no re-review and the matter could be appealed to the Tribunal, the appellant and Mr Patel should reasonably have either sought to have appealed to the tribunal on an urgent interim basis whilst waiting for this information or expedited their enquiries with Ms Williams or both. 67. The delay between 18 July and 16 October 2016 is around three months. We do not consider this to be reasonable. Although the first line of Mr Richardson’s email of 17 July 2016 states that he awaits the invoices, the last lines of the email also make clear that the matter is concluded and a Tribunal appeal should be utilised. There was minimal ambiguity within the email when read as a whole. 68. Furthermore, the delay, in waiting a further three months following receipt of this email to appeal was unreasonably long. It has to be considered in the context of correspondence that had been conducted at least since September 2015 and in which a Tribunal appeal had been repeatedly advised. We did not receive any evidence concerning the date and manner in which the further invoices were sent to officer Richardson by Mr Patel or others in order to be considered. Nonetheless, assuming they were sent at around the same time as the email of 17 July 2016, it would not be reasonable to wait a further three months without either chasing the officer for a reply or lodging an appeal. One would expect such a course of action to be taken within 28 days at the latest. 69. Looking at the delay as a whole, there was not a good explanation for the period of around 9 or 10 months between 26 November 2015 and 16 October 2016 in lodging the appeals against the VAT registration review decision. Consequences of extending time or refusing to extend time 70. If the Tribunal were to grant the appellant’s application and give permission to admit the late appeal, the consequence is that the substantive merits of his appeal would be heard. The Tribunal has not considered the merits of his appeal in determining the application. 71. The consequence for HMRC of giving permission and admitting the appeal is that HMRC will have to devote resources to defending the appeal following what has been a long and historical process. 72. The consequence of dismissing the application and refusing permission to extend time to admit the appeal would be serious for the appellant. He will be liable to pay an outstanding sum in taxes and penalties that is currently estimated to be at least £94,000. HMRC enforcement action began in July 2016 and a debt collection agency was employed. It is said that he has no assets and is likely to be rendered bankrupt although no evidence has been received from the appellant on this point. 73. The consequence for HMRC of refusing permission will be that the outstanding liabilities will become due from the appellant. Conclusion 74. The Tribunal having weighed up all the factors, has decided to dismiss the application and declines to admit the appeal. It considers this to be in accordance with the interests of justice and overriding objective to be just and fair to all parties. 75. The length of the delay was significant, and the appellant and his agent did not provide a good explanation for the delay in appealing the three decisions between October 2015 and October 2016. The Tribunal considers that there were various types of liabilities demanded by HMRC and the appeal against which is late. It should reasonably have been pursued to the Tribunal at an earlier stage. While the consequences of not admitting the appeal may be serious for the appellant this does not outweigh the other factors in the case. The purpose of the deadline for the appeal is to ensure finality of HMRC’s decisions within a reasonable period and certainty for all taxpayers. The routes of appeal and timescale in which they should be made were communicated to the appellant. 76. Therefore, the Tribunal dismisses the application for permission to admit the appellant’s late appeal. 77. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. RUPERT JONES TRIBUNAL JUDGE RELEASE DATE: 20 NOVEMBER 2017