Remiglio di Lellio v The Commissioners for HMRC [2025] UKFTT 1071 (TC)

[2025] UKFTT 01071 (TC)Case No TC09630
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 21 August 2025Date Judgment date: 4 September 2025
By remote video hearing
Appeal reference: TC/2024/00443
PROCEDURE –application for permission to make late appeal – Martland and Medpro considered – application refused
Before
TRIBUNAL JUDGE ANNE REDSTONMS HANNAH DEIGHTON
Between
REMIGLIO DI LELLIOAppellantTHE COMMISSIONERS FORRespondentHIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Peter Sanders, of Thomas Cooke & Co, accountants for AppellantMs Fiona Man, Litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction and Summary

[1]HM Revenue & Customs (“HMRC”) had issued Mr Di Lellio with the following assessments:(1) Discovery assessments for the year 2011-12 of £6,074.35 and for the year 2012-13 of £28,117.25, both issued on 7 February 2018.(2) Closure notices and related amendments for the years 2013-14 to 2015-16 issued on 30 January 2019; the extra tax was £12,806,27; £12,253.90 and £7,578.35 respectively.(3) Inaccuracy penalties for all the above years, totalling £16,064; these were issued on 1 February 2019.(4) A personal liability notice (“PLN”) of £21,552 issued on 8 November 2018 and a further PLN of £2,728.02 issued on 25 January 2019.[2]None of the above was appealed within the statutory time limits. Mr Di Lellio applied to the Tribunal for permission to make late appeals (“the Application”) on the basis that he was not liable to tax on certain rental income. For the reasons set out below, we refuse to give Mr Di Lellio permission to make late appeals. We make some observations about the PLNs at the end of this decision.[3]In the rest of this Decision, we have referred to the years from 2011-12 to the date of this hearing as “the relevant period”. All legislation and case law is cited only so far as relevant to the issues being considered.

The Evidence

[4]The Tribunal was provided with two bundles (together, “the Bundle”),which contained over 700 pages of documents and authorities, including correspondence between the parties, and between the parties and the Tribunal; extracts from the Companies House website and notes of meetings.[5]Mr Di Lellio provided a witness statement, but did not attend the hearing. His representative Mr Sanders said this was because Di Lellio was elderly and infirm, and that he wanted the Application to be considered on the basis of the documents in the Bundle together with Mr Sanders’s oral submissions. On behalf of HMRC, Ms Man said it was in the interests of justice to continue in the absence of Mr Di Lellio, and we agreed.[6]However, as Mr Di Lellio did not attend, Ms Man could not cross-examine him on his witness statement. We therefore did not place weight on the parts of that statement relating to rental income, unless supported by documentary evidence. We set out at §92 below, the documents in the Bundle which relate to rental income.[7]Ms Man informed us that all the HMRC officers involved in making the decisions for which Mr Di Lellio was now seeking permission to appeal had subsequently left HMRC and so were not available to give evidence. We instead place reliance on the correspondence in the Bundle.[8]As is clear from our findings of fact below, throughout the relevant period Mr Thomas Cooke of the accountancy firm Thomas Cooke & Co has been Mr Di Lellio’s agent. However, Mr Cooke did not provide a witness statement or attend the hearing. Instead, Mr Sanders, who described himself as a consultant acting on behalf of the same firm, provided a skeleton argument and attended to represent Mr Di Lellio. He confirmed that(a) Mr Cooke was still working for the firm, but(b) that he would not be attending to give evidence about what had happened during the relevant period.[9]The role played by Mr Cooke was a key issue in this appeal. The Tribunal considered before the hearing began whether Mr Sanders was conflicted, but as he was not involved in the events, and as he was a consultant and not an employee of the firm, we proceeded on the basis that he was not conflicted. As the hearing progressed, that initial view was confirmed: Mr Sanders was entirely straightforward in his approach to the evidence and in his submissions, and did not take a position which favoured Thomas Cooke & Co but which was against Mr Di Lellio’s interests.[10]On the basis of the evidence provided to us, we make the findings of fact in this Decision.

Findings of fact

[11]During some or all of the relevant period, Mr Di Lellio was the owner and director of two companies, Da Remo Ltd and Da Remo Restaurants Ltd (“the Companies”). The Companies ran restaurants in which Mr Di Lellio worked, one of which was in Denham and one in Rickmansworth.[12]Around 2015, HMRC began investigating Mr Di Lellio’s tax position, as well as the Corporation Tax (“CT”) and Value Added Tax (“VAT”) liabilities of the Companies. Included in the Companies’ accounts and tax returns were deductions for rent paid to Mr Di Lellio, but some or all of that rent was not included in Mr Di Lellio’s self-assessment (“SA”) tax returns.

Tax years 2011-12 and 2012-13: assessments

[13]On 7 February 2018, HMRC issued Mr Di Lellio with discovery assessments for 2011-12 of £6,074.35 and for the year 2012-13 of £28,117.25, on the basis that rent had been omitted from his SA returns.[14]On 6 April2018, Mr Cooke wrote to HMRC’s Debt Management department on Mr Di Lellio’s behalf, saying:
“I refer to the statement of liabilities enclosed and request postponement of collection until the outcome of an inquiry for 2012 and 2013 has been completed.”
[15]We infer that the inquiry which had not yet been completed was a reference to the continuing CT and VAT investigations into the Companies.[16]On 2 May 2018, a meeting took place between(a) Mr Cooke and Mr Di Lellio and(b) Officer Fowler together with HMRC colleagues. During the meeting, Mr Cooke said he had appealed the assessments, but Officer Fowler told him no appeal had been received, and asked him to send copies. Mr Cooke agreed to do this the following week, but did not do so.[17]On 14 September 2018, Mr Cooke sent Officer Fowler the request he had made for the tax to be postponed, together with a covering email which read “I attach a copy of the request to stand over collection of assessed tax”.[18]Officer Fowler replied by return, saying:
“I am sorry but the attachment is not a valid appeal. I attach a PDF about appeals. If you look at point 2 you will see that an appeal must include details of what the person disagrees with and why as well as what the person thinks the correct figures are and how they have calculated them. Your attachment does not do that, it is asking for postponement because there is an open enquiry which is not a valid ground of appeal.”
[19]Officer Fowler also attached guidance from the gov.uk website about how to make a valid appeal. Mr Cooke did not respond.

Tax years 2013-14 to 2015-16: assessments

[20]On 7 December 2018, Officer Fowler sent Mr Cooke a letter saying she was about to close her SA enquiries into the three years 2013-14 to 2015-16. She attached computations of the extra tax she had decided was due, including profits from land and property relating to rental income. The extra tax was £12,806.27; £12,253.90 and £7,578.35 respectively. Part of that tax related to other errors or omissions identified in Mr Di Lellio’s SA returns.[21]On 30 January 2019, Officer Fowler issued closure notices for those three years, together with amendments to Mr Di Lellio’s returns, on the basis set out in her letter of 7 December 2018. Her covering letter began as follows (our emphasis):
“Further to my letter dated 7 December 2018. As I have not received any communications indicating that my best judgment proposals should be revised, I have issued closure notices and amendments to Mr Di Lellio using the amounts set out in that letter. I enclose copies of these notices and enclosures. Penalty assessments will be issued under separate cover. Mr Di Lellio has the right of appeal against these decisions. Any appeals must be made within 30 days of the date of the notice and clearly state: Exactly what the grounds of appeal are, for example “the income from selfemployment is overstated”
. Each year should be listed separately unless the grounds are identical for all years.  Any postponement required  What the correct amount should be together with supporting documents to verify this… If there is anything you wish to discuss you can call me on the number shown…Alternatively you can e-mail me.” Exactly what the grounds of appeal are, for example “the income from selfemployment is overstated”. Each year should be listed separately unless the grounds are identical for all years.  Any postponement required  What the correct amount should be together with supporting documents to verify this…

The Form

[22]Attached to Mr Di Lellio’s Notice of Appeal to the Tribunal was a template Inland Revenue form The Form refers throughout to the Inland Revenue, although that body had ceased to exist in 2005, some 13 years previously. headed “Notice of appeal and application to postpone payment” relating to Mr Di Lellio (“the Form”).[23]The Form had been completed in manuscript and included the following:(1) Under “Notice of appeal – assessments” it lists the three years 2013-14, 2014-15 and 2015-16, together with the amounts referred to in Officer Fowler’s letter of 7 December 2018 which were assessed on 30 January 2019.(2) Under “reasons for appeal”, the words “Mr Di Lellio did not receive the rents assessed by HMRC”.(3) Mr Cooke’s signature, followed by the date of 28 December 2018. The last figure of that date has been crossed out and replaced by a “9”, so it reads “2019”.[24]The change of date was unexplained. As noted, there was no witness statement from Mr Cooke and he did not attend the hearing. We accepted that a person might mistakenly misdate a form in January, when a new year had just begun, but we found it improbable that he would do so December, at the very end of a year. On the balance of probabilities, we found that the Form had been completed and dated in December 2018, and subsequently amended. Mr Sanders agreed this was the most likely scenario.[25]No covering letter was attached to the Form and it was not referred to in any of the correspondence between the parties; instead, it emerged for the first time as an attachment to the Notice of Appeal. We find as a fact that the Form was never sent to Officer Fowler, because had that been the position, it is not credible that neither she nor Mr Cooke would have referred to it in the course of the lengthy correspondence between the parties.

Mr Di Lellio’s diagnosis

[26]On 1 October 2018, Mr Di Lellio was diagnosed with “high risk prostate cancer”. The Tribunal was provided with a letter from his clinical consultant oncologist issued on that date, confirming the diagnosis. The oncologist also said that Mr Di Lellio “continues to be very active” working in his restaurant, and we find that to be a fact. No subsequent medical evidence was included in the Bundle.

Penalties for inaccuracies

[27]On 1 February 2019, Officer Fowler issued Mr Di Lellio with inaccuracy penalties for the five years 2011-12 through to 2015-16, which totalled £16,064. No appeal was made against those penalties by or on behalf of Mr Di Lellio. PLNs[28]On 8 November 2018, having received information that Da Remo Restaurants Ltd was about to be liquidated, HMRC issued it with a “deliberate” penalty of £21,552 relating to VAT inaccuracies; on the same day it issued Mr Di Lellio with a PLNof 100% of the penalty.[29]On 25 January 2019, HMRC issued the same company with a further deliberate penalty of £2,728.02, this time relating to CT, and on the same day, issued Mr Di Lellio with a PLN of 100% of the penalty.[30]No appeal was made for or on behalf of Mr Di Lellio against those PLNs.In April 2020, HMRC carried out a statutory review of the CT and VAT assessments and withdrew them. Later the same month HMRC cancelled the related penalties. As at the date of the hearing, the PLNs remained extant.

Subsequent events including bankruptcy proceedings

[31]On 21 August 2019, Officer King of HMRC’s “Targeted Enforcement Recovery Unit” or “TERU”, wrote to Mr Di Lellio about the amounts due from him, and how to pay. On 2 September 2019, she called Mr Di Lellio to discuss payment, and recorded that Mr Di Lellio was “under the impression there was an appeal in place”. On the same day, she spoke to Mr Cooke and told him no appeals had been submitted.[32]On 11 December 2019, Officer King wrote again to Mr Di Lellio, attaching a bankruptcy warning letter. Mr Di Lellio responded by return, saying (emphasis in original):
“I have received your bankruptcy notice of £96,288.86 and draw your attention that the matter is under appeal with the Inspector of Taxes. Furthermore my accountant Thomas Cooke has spoken with the Collector of Taxes and made them fully aware that there is an appeal outstanding and NOT settled. The major item appealed against is an assessment for rent that I did NOT receive of £70,000.”
[33]He asked Officer King to liaise with his accountants, as he was “spending a lot of time with the medical treatment and do not have the energy to deal with this type of worrying correspondence”.[34]On 6 January 2020, Officer King wrote to Mr Cooke, reminding him of their conversation of 2 September 2019. On 10 January 2020, Officer Fowler wrote to Mr Di Lellio setting out the assessment and penalty decisions, including a step by step summary of the exchanges with Mr Cooke and explaining (again) that no appeals had been received.[35]On 16 January 2020, Mr Di Lellio wrote a detailed letter to HMRC about the CT and VAT investigations.[36]On 11 February 2020, Mr Cooke wrote to Officer King, saying “I reiterate that an appeal has been filed against the assessment for rents which he did not receive”.[37]On or around 14 February 2020, HMRC filed and served a statutory demand. On 19 February 2020, Officer King wrote to Mr Di Lellio explaining the reasons for the demand, and saying, in bold:
“Corresponding with your Accountant Thomas Cooke There is no appeal held for your company or you personally.”
There is no appeal held for your company or you personally.”[38]On 12 February 2020, Mr Cooke requested a statutory review of the CT and VAT assessments, and HMRC agreed to carry out those reviews. On 24 February 2020, Mr Cooke emailed the officer who was carrying out the statutory review of the CT assessments, acknowledging his letter about that review, and adding “we have also requested a review of the assessments made on Mr Di Lellio and have lodged an appeal previously”.[39]On 3 March 2020, Mr Cooke emailed HMRC, saying that the assessments were “for rent which was not received has been appealed against in 2018 and requested postponement of the tax demanded”.[40]On 30 June 2020, the statutory demand was set aside by the County Court, following Mr Di Lellio’s application. There was then a delay due to Covid.[41]On 18 September 2021, Mr Di Lellio wrote to Officer King saying that “an appeal was lodged at the outset” against the inclusion of rental income in the assessments, and he also set out various points relating to the CT and VAT enquiries.[42]On 21 October 2021,HMRC filed and served a second statutory demand. On 28 March 2022, Deputy District Judge Hayes set that demand aside, having been informed by Counsel acting for Mr Di Lellio that there were open appeals which had not yet been determined.[43]On 21 September 2022, Mr Doherty of HMRC’s Debt Management Office wrote to Mr Di Lellio saying that no formal appeals were in place, and referring to Officer Fowler’s email of 14 September 2018 which stated that Mr Cooke’s letter asking to stand over the tax was not a valid appeal.[44]On 3 April 2023, HMRC filed a third statutory demand, and on 17 November 2023 filed and served a related witness statement to the effect that there were no extant appeals. The total figure now sought was £139,029.70. It included(a) the assessments, penalties and PLNs referred to above;(b) income tax for 2016-17 through to 2021-22;(c) two penalties under FA 2008, Sch 36 for failing to provide information;(d) late payment penalties from 2014-15 through to 2020-21, and(e) significant sums by way of interest. Mr Sanders told us that the bankruptcy proceedings have been stayed pending the hearing of Mr Di Lellio’s application.[45]At some point after the filing of that petition, but before this hearing, Mr Di Lellio paid HMRC £15,842 in part satisfaction of the amounts owed.

Jurisdiction of the Tribunal

[46]The Tribunal only has the jurisdiction to hear an application to make a late appeal if(a) a person has first appealed to HMRC, and(b) that appeal has been refused, see Taxes Management Act 1970 (“TMA”), s 49(2).[47]It was common ground that no appeal had been made to HMRC in relation to the penalties or the PLNs, but it was Mr Di Lellio’s case that appeals had been made against the discovery assessments and the amendments to his SA returns.

The legislation about appeals

[48]Part IV of the TMA sets out the law relating to the making of appeals against discovery assessments and closure notice amendments. Within that Part, TMA s 31 is headed “Appeals: right of appeal”, and subsection (1) provides:
“An appeal may be brought against (a) … (b) any conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act (amendment by Revenue on completion of enquiry into return), (c) …; or (d) any assessment to tax which is not a self-assessment.” (a) … (b) any conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act (amendment by Revenue on completion of enquiry into return), (c) …; or (d) any assessment to tax which is not a self-assessment.”
[49]Mr Di Lellio thus had the right to appeal against the amendments to his SA returns under TMA s 31(1)(b), and against the discovery assessments under TMA s 31(1)(d).[50]TMA s 31A is headed “Appeals: Notice of Appeal” and provides: “(1) Notice of an appeal under section 31 of this Act must be given—(a) in writing,(b) within 30 days after the specified date,(c) to the relevant officer of the Board. (2) … (3) In relation to an appeal under section 31(1)(b) of this Act (a) the specified date is the date on which the closure notice was issued, and (b) the relevant officer of the Board is the officer by whom the closure notice was given. (4)-(4A)… (5) The notice of appeal must specify the grounds of appeal.” (a) in writing, (b) within 30 days after the specified date, (c) to the relevant officer of the Board. (a) the specified date is the date on which the closure notice was issued, and (b) the relevant officer of the Board is the officer by whom the closure notice was given.

The discovery assessments

[51]As is clear from the above, it is a statutory requirement under TMA s 31A(5) that a notice of appeal specify the grounds of appeal. The only document filed by Mr Cooke relating to the discovery assessments was a postponement application, and as Officer Fowler said, that did not constitute a notice of appeal. As a result, no appeals had been made to HMRC against the discovery assessments.

The closure notice amendments

[52]In relation to closure notice amendments, the legislation requires that the appeal be given to the “the officer by whom the notice of amendment was given”, here Officer Fowler. We have already found as a fact that the Form was not given to Officer Fowler, and there is no other document which comes within the statutory description.[53]Even if the Form had been sent to Officer Fowler on or soon after the date on which it was signed, it would still not have been a valid appeal. It was dated 28 December, after Officer Fowler’s letter of 7 December 2018 setting out her view of the position but before she issued the closure notices on 30 January 2019. TMA s 31A provides that a notice of appeal must be made “within 30 days” of “the date on which the notice of amendment was issued”.[54]It therefore follows that no appeal had been made against the closure notice amendments to Mr Di Lellio’s SA returns.

The steps taken by the parties

[55]It took some time during the hearing to establish the appeal position in relation to each of the matters encompassed by the Application, in part because of the way the documents were organised in the Bundle. However, when that exercise had been completed, Mr Sanders agreed with Ms Man that no appeals had been made, and thus that the Tribunal had no jurisdiction.[56]The parties then agreed the following steps and carried them out:(1) Mr Sanders made an application to HMRC to appeal all the decisions referred to in the Application, by sending an email to Ms Man;(2) Ms Man refused the appeal on behalf of HMRC by replying to Mr Sanders’s email; and(3) the Tribunal was copied on that correspondence.[57]It followed that the Tribunal then had the jurisdiction to hear Mr Di Lellio’s application to make late appeals. Both parties asked us to continue with the hearing and decide the Application.

The timing of the Application

[58]Rule 21 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Tribunal Rules”) is headed “Starting proceedings by originating application or reference”, and paragraph (1) provides: “Where an enactment provides for a person or persons to make an originating application or reference to the Tribunal, the appellant must start proceedings by providing an application notice or notice of reference to the Tribunal within any time limit imposed by that enactment.[59]A person can thus “start proceedings” by filing a Notice of Appeal only if an enactment entitles the person to do so. In this case, the Application was made before the date on which Mr Di Lellio was entitled to apply to the Tribunal for permission to make late appeals.[60]However, Rule 5 begins:
“(1) An irregularity resulting from a failure to comply with any requirement in these Rules, a practice direction or a direction does not of itself render void the proceedings or any step taken in the proceedings.

(a) waiving the requirement; …” (a) waiving the requirement; …”

[61]Rule 2(1) provides that the Tribunal must apply the overriding objective, and that this includes avoiding unnecessary formality, seeking flexibility in the proceedings and “avoiding delay”. As the statutory requirements had been satisfied, we decided it was in the interests of justice to accept that the procedural requirements in the Rules had also been met.[62]We thus went on to consider whether to give Mr Di Lellio permission to make late appeals.

The Case Law

[63]There has been extensive case law as to how the Tribunal should approach applications to make a late appeal. In Martland v HMRC [2018] UKUT 0178 (TCC) (“Martland”) at [44] the Upper Tribunal (“UT”) (Judges Berner and Poole) set out the following three stage test which this Tribunal should apply in deciding whether to give permission for a late appeal:(1) establish the length of the delay and whether it is serious and/or significant;(2) establish the reason(s) why the delay occurred; and(3) evaluate all the circumstances of the case, using a balancing exercise to assess the merits of the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission, and in doing so 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”.[64]In Medpro v HMRC [2025] UKUT 255 (TCC) (“Medpro”) at [88], a differently constituted UT, made up of Marcus Smith J and Judge Cannan, endorsed that three stage test, describing it as “an unimpeachable approach”.[65]In Martland, the UT held that, in evaluating “all the circumstances”, a Tribunal should place “particular importance” on the need(a) for litigation to be conducted efficiently and at proportionate cost; and(b) to enforce compliance with rules, practice directions and orders. In Medpro, Judge Cannan agreed this was correct, but Smith J disagreed, saying that no special weight should be given to those factors: in other words, they did not have a “top seat at the table”. As Smith J was the senior of the two judges, he had the casting vote.[66]In making this Decision, we have therefore followed Medpro. In consequence, when considering all the circumstances of the case, we have not given particular weight to factors (a) and (b) above, but considered them along with others.

The first Martland stage: the delays

[67]The first stage is to establish the length of the delay and whether it is serious and/or significant.[68]It was common ground that TMA s 31A required Mr Di Lellio to appeal the assessments within 30 days, but they were made on 21 August 2025, the day of this hearing. The appeals against the discovery assessments were thus over seven years late and all other appeals were over six years late.[69]Although Mr Sanders submitted that the delays were not serious and significant, we have no hesitation in agreeing with Ms Man that, in the context of an appeal right that was required to be exercised in 30 days, all the delays were both serious and significant.

The second Marland stage: reasons for delays

[70]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:(1) On 2 May 2018, Mr Cooke told Officer Fowler that he had appealed the discovery assessments.(2) On 11 December 2019, Mr Di Lellio wrote to Officer King saying that Mr Cooke had contacted HMRC and “made them fully aware that there is an appeal outstanding and NOT settled”.(3) On 11 February 2020, Mr Cooke wrote to Officer King saying “I reiterate that an appeal has been filed against the assessment for rents which he did not receive”.(4) On 24 February 2020, Mr Cooke wrote to the CT statutory review officer, saying “we have also requested a review of the assessments made on Mr Di Lellio and have lodged an appeal previously”.(5) On 18 September 2021, Mr Di Lellio wrote to Officer King saying that “an appeal was lodged at the outset” against the inclusion of rental income in the assessments.(6) On 28 March 2022, Deputy District Judge Hayes was informed by Counsel acting for Mr Di Lellio that there were open appeals which had not yet been determined.[71]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:(1) On 2 May 2018, Officer Fowler told Mr Cooke that no appeal had been made and asked him to send copies. Although he said he would do so, he did not send anything until 14 September, when he sent Officer Fowler a copy of the postponement request made on 6 April 2018.(2) Officer Fowler told Mr Cooke by return that an application to postpone tax was not an appeal, and she also attached guidance about to how to make a valid appeal, but Mr Cooke did not respond.(3) Officer Fowler expressly stated in the closure notices that “Any appeals must be made within 30 days of the date of the notice”; explained how to make an appeal, and provided her contact details, but Mr Cooke did not respond.(4) On 2 September 2019, Officer King spoke to Mr Cooke on the phone and told him no appeals had been submitted, and she wrote to him on 6 January 2020, reminding him of that conversation.[72]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.[73]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.”
[74]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.”
[75]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.”
[76]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.”
[77]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.”
[78]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”.[79]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)…”
[80]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.[81]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:(1) On 10 January 2020, Officer Fowler wrote to Mr Di Lellio setting out the assessment and penalty decisions. She provided a step by step summary of the exchanges with Mr Cooke and explained that no appeals had been received.(2) On 19 February 2020, Officer King wrote to Mr Di Lellio saying, in bold “Corresponding with your Accountant Thomas Cooke. There is no appeal held for your company or you personally”.(3) On 21 September 2022, Mr Doherty of HMRC’s Debt Management Office wrote to Mr Di Lellio saying that no formal appeals were in place, and he referred to Officer Fowler’s email of 14 September 2018 which stated that Mr Cooke’s letter asking to stand over the tax was not a valid appeal.[82]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.[83]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:(1) At the time of his diagnosis, Mr Di Lellio continued to be “very active” working in his restaurant.(2) On 16 January 2020, he wrote a detailed letter to HMRC about the CT and VAT investigations.(3) On 3 March 2020, he emailed HMRC, and on 18 September 2021, he wrote to Officer King.(4) On 12 February 2025, he provided a detailed witness statement to support the Application.[84]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 Martland stage

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

Reliance on advisers

[86]Parts of the UT’s judgment in Katib were set out earlier in this Decision, including their finding at [56] that in the context of the second stage, reliance on advisers “is unlikely to amount to a “good reason” for missing the statutory deadlines. The UT continued in the same paragraph:
“…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.”
[87]However, the UT went on to find that, for the same reasons as those relating to the second stage, the behaviour of Mr Katib’s adviser had no “real weight” at the third stage. We find that the position is the same here. Having received HMRC’s detailed and clear explanatory letters saying no appeals had been made, Mr Di Lellio could and should have asked Mr Cooke to show him copies of the appeals which he said he had made, together with copies of related HMRC correspondence, but he instead sat back and continued to accept what he had been told. We place no weight on this factor.

The need for time limits to be respected

[88]Although the UT said in Martland that significant weight must be placed as a matter of principle on the need for statutory time limits to be respected, we have followed Medpro and not given that factor a “top seat at the table”. It is nevertheless remains a factor to be considered at this third stage.[89]Mr Di Lellio’s appeals should have been made within 30 days of the assessments, but were between six and seven years late. That factor weighs against Mr Di Lellio, not because we have adopted the Martland approach, but because the delays are extremely long.

Merits

[90]The UT said in Martland thatthere is “much greater prejudice for an applicant to lose the opportunity of putting forward a really strong case than a very weak one”, adding that the Tribunal should not “descend into a detailed analysis of the underlying merits of the appeal” but instead “form a general impression of its strength or weakness to weigh in the balance”.[91]There was no dispute (and we have found as a fact) that the Companies’ tax returns included deductions for rent paid to Mr Di Lellio, and that some or all of that rent was not included in Mr Di Lellio’s SA returns. Mr Di Lellio’s case, as put in his Notice of Appeal, was as follows:
“Mr Di Lellio denies that he received such rent but even if he had received the rent, then it would have been on-payable to the landlord. would either, upon receipt, have held it on constructive trust for the landlord; or, if he received it as income, he would have had expenditure (in the form of payment to the landlord) equal to the rent received, and therefore a profit of nil.”
[92]In order to make that case, Mr Di Lellio would need to file evidence. His witness statement essentially reiterates the passage from the Notice of Appeal. The only documents in the Bundle were the following:(1) various of Mr Di Lellio’s bank statements dated 2009 and 2010;(2) a lease of the Rickmansworth restaurant, dated 2003; and(3) three statements from the landlord of the property from which that restaurant was run, also dated 2003.[93]None of that evidence is contemporaneous with the assessments Mr Di Lellio is seeking permission to appeal. Mr Sanders told us that there were no other documents, but that if permission to appeal were given, Mr Di Lellio could ask his banks and/or the landlord for more documents. We can only make our decision on the basis of the material currently being relied on, and it is in any event unlikely that either the banks or the landlord would be able to provide documents relating to the years 2011-12 to 2015-16: even the most recent of those periods is over nine years ago.[94]On that basis, the only evidence before the Tribunal hearing the substantive case would be Mr Di Lellio’s oral evidence, unsupported by documents. Our general impression is that the merits of his case are weak.

Other prejudice to Mr Di Lellio

[95]If Mr Di Lellio fails to obtain permission to appeal, the HMRC decisions he is now seeking to challenge will become final and the bankruptcy proceedings will recommence. We did not have an up to date figure for the amount in issue, but the bankruptcy petition filed in 2023 gives a figure of £139,029.70.[96]However, not all of the amounts sought by HMRC relate to Mr Di Lellio’s rental income. Officer Fowler also amended his SA returns for 2012-13 to 2015-16 for other matters, see §20, and the statutory demand also included tax for later years (2017-18 through to 2021-22); two penalties under FA 2008, Sch 36 for failing to provide information; late payment penalties from 2014-15 through to 2020-21 and significant sums by way of interest on these other debts. It follows that even if Mr Di Lellio were to receive permission to make late appeals, he would still owe HMRC a substantial amount of money.[97]In addition, having to pay HMRC the sums for which permission to appeal has been sought in the Application is the inevitable consequence of failing to gain permission to appeal. We therefore give little weight to this factor.

Prejudice to HMRC

[98]If permission were to be given, HMRC would have to divert resources to prepare for the appeal and attend a hearing. Those resources could otherwise be used to ensure that other taxpayers are paying the correct amount of tax. Moreover, because of the passage of time, the Officers in question no longer work with HMRC. Even if they can be located and are willing to attend, the assessments in question were made in 2018 and 2019, and the passage of time (caused by the delay in applying for permission to appeal) is likely to have affected their memory of the events in question, and this may prejudice HMRC’s position.

Other Tribunal users

[99]If the Application were to be allowed, organising the relate appeals will take the time of tribunal staff, and the historic nature of the issues means that it is likely to take longer than if the appeals had been made by the statutory time limits. That time would otherwise be spent on the appeals of other Tribunal users, who have complied with the statutory requirements.

Balancing the factors

[100]Once the circumstances have been identified, they must be balanced.[101]On one side of the scales is the prejudice to Mr Di Lellio if he loses this opportunity of appealing to the Tribunal because the tax and penalties will become due, and his bankruptcy proceedings will recommence. However, we have given little weight to that factor.[102]On the other side is Mr Di Lellio’s failure to comply with the statutory time limits for between six and seven years; the weakness of his substantive case, and the prejudice to HMRC and to appellants in other cases for the reasons set out above. There is no doubt that those factors significantly outweigh those on Mr Di Lellio’s side of the scales, and permission to appeal late is therefore refused. The

PLNs

[103]As noted earlier in this decision, HMRC had issued assessments and related penalties to Da Remo Restaurants Ltd, and on 8 November 2018 and 25 January 2019 issued PLNs to Mr Di Lellio. In April 2020, HMRC withdrew those assessments and cancelled the penalties. However, the PLNs remained extant.[104]The PLNs were issued under Finance Act 2007, Schedule 24, para 19, which by subparagraph (1), provides:
“Where a penalty under paragraph 1 is payable by a company for a deliberate inaccuracy which was attributable to an officer of the company, the officer is liable to pay such portion of the penalty (which may be 100%) as HMRC may specify by written notice to the officer.”
[105]We asked whether HMRC had considered whether a PLN could remain extant when the penalty to which it related had been cancelled. Ms Man said she would refer this point to the relevant technical team, and having done so, would respond to Mr Di Lellio.[106]However, we emphasise whether the PLNs remain payable is a matter between HMRC and Mr Di Lellio; it was not before the Tribunal for determination.

Right to apply for permission to appeal

[107]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 Rules. 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. Release Date: 04th SEPTEMBER 2025