Tyrone Thompson v The Commissioners for HMRC [2025] UKFTT 272 (TC)

[2025] UKFTT 00272 (TC)Case No TC09441
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 7 January 2025Date Judgment date: 27 February 2025
Appeal reference: TC/2023/00965
Non-attendance - Rule 33 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 - Late Appeal - Martland considered – Penalties – Schedule 24 of the Finance Act 2007 – Was behaviour deliberate? – Yes – Appeal refused.
Before
TRIBUNAL JUDGE JENNIFER NEWSTEAD TAYLORTRIBUNAL MEMBER SUSAN STOTT
Between
MR TYRONE THOMPSONAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentNo attendance for AppellantMr D Bradley, Presenting Officer of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]This is an appeal by Mr Thompson against two penalties (“together the Penalties”), dated 20 October 2022, in the total sum of £2,735.11 made under Schedule 24 Finance Act 2007 (“FA 07”) as detailed below:(1) First, Mr Thompson was charged a penalty of £253.89 in respect of inaccuracies in his Tax Return for the year ending 5.4.21 (“ the 20/21 Penalty.”)(2) Second, Mr Thompson was charged a penalty of £2,481.22 in respect of inaccuracies in his Tax Return for the year ending 5.4.22 (“ the 21/22 Penalty.”) The Hearing i). The Appellant’s Non-Attendance:[2]This appeal has a protracted history.[3]There have been three hearing dates. The first hearing was postponed due to technical failures with an online hearing. The second hearing, initially listed for an in person hearing but varied to an online hearing, was postponed because the Appellant was using a mobile phone both to attend the hearing and access the hearing bundle despite having been advised, in advance, of the need to have(i) the required equipment and(ii) access to the bundle in hard copy or on a separate device. This, the third hearing, was listed as an in person hearing in accordance with the parties’ availability as provided to the Tribunal in October 2024.[4]The Appellant applied to postpone this hearing due to work commitments. On or around 16 December 2024, Judge Brown KC rejected this application noting that the hearing had been listed in accordance with the parties' availability and it appeared the Appellant was not giving sufficient priority to the appeal. She stated that the Appellant could remake the adjournment application on the morning of the hearing if he wished.[5]On 4 January 2025, the Appellant emailed the Tribunal stating that he was not able to make this hearing. He had had 2 weeks off work over Christmas and New Year and needed to return to work as he was behind with rent and bills. He lost a day’s wages for the second hearing which was postponed. He couldn’t take another day off. Notably, the email did not apply to adjourn / postpone the hearing. It simply informed the Tribunal that the Appellant would not be attending.[6]On 5 January 2025, the Respondents emailed the Tribunal seeking confirmation that the hearing would proceed in the Appellant’s absence.[7]On 6 January 2025, the Tribunal informed the parties that this hearing remained listed on 7 January 2025 in person in Manchester. All parties were encouraged to attend, bringing with them all necessary documentation. The Appellant was warned that if he did not attend the Tribunal could proceed in his absence in accordance with Rule 33 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”), which could lead to the appeal being dismissed.[8]On 7 January 2025, the Appellant did not attend. In accordance with Rule 33 of the Rules, we considered whether or not to proceed in his absence. In light of the fact that(i) the hearing was listed in accordance with the Appellant’s available dates,(ii) the Appellant had applied (unsuccessfully) to adjourn the hearing and(iii) the Appellant had emailed the Tribunal stating that he would not be attending the hearing, we were satisfied that the Appellant had been notified of the hearing, Rule 33 (a) of the Rules. Further, we considered that it was in the interests of justice and in accordance with the overriding objective to proceed with the hearing as this approach was proportionate to the importance of the case and the complexity of the issues, allotted an appropriate share of the Tribunal’s resources to this appeal (bearing in mind the previously lost hearing dates), and avoided delay, Rules 2 and 33 (b) of the Rules. Accordingly, we decided to proceed in the Appellant’s absence. ii). The Evidence[9]Mr Bradley and Officer Rowe (the Decision Maker) attended for the Respondents. We had(i) the Respondents’ Skeleton Argument,(ii) a Hearing Bundle of 343 pages,(iii) a printout of Schedule 24 Finance Act 2007,(iv) a copy of Collis v The Commissioners for Her Majesty’s Revenue & Customs [2011] UKFTT 588 (TC),(v) an email from the Appellant dated 10 October 2024 and(vi) a letter from the Respondents dated 23 October 2024. We heard submissions from Mr Bradley addressing (a) the late appeal, (b) the Respondent’s burden of proof, (c) deliberate behaviour, (d) the Appellant’s grounds of appeal and (e) the amount of the penalty.

The Issues

[10]At the second hearing, the Tribunal (comprising Judge Newstead Taylor and Tribunal Member Robertson) sought to clarify the extent of the Appellant’s appeal, noting that the Appellant could appeal against the making of the penalties under Paragraph 15 (1), Schedule 24 Finance Act 2007 and / or the amount of the penalty under Paragraph 15 (2) Schedule 24 Finance Act 2007. The Tribunal gave the Appellant time to consider his position and directed that the Appellant write to the Tribunal and to the Respondents by 4pm on 16 October 2024 confirming if he is appealing(i) the making of the Penalties or(ii) the amount of the Penalties or(iii) both.[11]On 10 October 2024, the Appellant emailed stating “I was asked to send u a email to in regards my tribunal case that Im against the penalties not the amount of penalties, if Im not supposed to send it you, can u forward to the relevant department.” Accordingly, the Appellant confirmed that he is appealing against the making of the Penalties under Paragraph 15 (1), Schedule 24 Finance Act 2007 and not against the amount of the Penalties under Paragraph 15 (2), Schedule 24 Finance Act 2007. In the circumstances, this is not one of those cases referred to in Collis v The Commissioners for Her Majesty’s Revenue & Customs [2011] UKFTT 588 (TC) at §25 where the taxpayer did not make a distinction between Paragraph 15 (1) and Paragraph 15 (2), Schedule 24 Finance Act 2007. The Appellant made an informed choice aware of the distinction.[12]Pursuant to Paragraphs 15 (1) and 17 (1), Schedule 24 Finance Act 2007, we can either affirm or cancel the Respondents’ decision to charge the Penalties. The burden of proof rests with the Respondents to demonstrate that the Penalties were correctly charged. Specifically, the Respondents must prove that the Appellant’s behaviour was deliberate as defined in Commissioners for HMRC v Tooth [2020] UKSC17 (“Tooth”). In the circumstances, the remaining principal issues for determination are (i) permission to appeal out of time and (ii) whether or not the Appellant’s behaviour was deliberate.[13]For the avoidance of doubt, we have no jurisdiction to substitute for the Respondents’ decision another decision that they had power to make as this jurisdiction only arises on an appeal against the amount of a penalty, Paragraph 15 (2) and 17 (2), Schedule 24 Finance Act 2007. Accordingly, we do not consider either the amount of the penalties or special circumstances At the second hearing, the Appellant referred to difficulties with alcohol. He was directed to write to the Respondents setting out his difficulties in this regard and their impact on matters the subject of this appeal by 4pm on 23 October 2024. The Appellant asked the Respondents if something from his AA sponsor would be suitable. He was told that it would, especially if it contained a timeline. Unfortunately, nothing was received. under Paragraph 11, Schedule 24 FA 07.

Findings of Fact

[14]We make the following findings of fact on the balance of probabilities. i). Tax Year ending 5 April 2020[15]On 9 April 2020, the Appellant submitted an electronic Tax Return for the year ending 5 April 2020 indicating Class 2 National Insurance due of £33.[16]On 23 June 2020:(1) The Appellant contacted the Respondents advising that a third party had offered to obtain a repayment of £9,000.(2) The Appellant’s 2019/20 Tax Return was amended to include a large amount of employment expenses generating a potential repayment of £14,000. Any repayment was to be made to the Appellant’s Santander bank account. The repayment was not issued.[17]On 24 June 2020:(1) The Appellant advised the Respondents that he suspected a fraudulent amendment had been made to his 2019/20 Tax Return. Consequently, the Respondents blocked repayments from the Appellant’s Self-Assessment account.(2) The Appellant’s 2019/20 Tax Return was amended, removing all figures. Therefore, no tax was due or payable for this year.[18]On 25 June 2020, the Appellant called the Respondents advising that an unknown party had amended his 2019/20 Tax Return resulting in the creation of a large overpayment.[19]On 27 June 2020, the Respondents confirmed, via Webchat, that repayments were being blocked and advised the Appellant to change his Self-Assessment password. ii). Tax Year ending 5 April 2021[20]On 6 April 2021, the Appellant’s Tax Return for the year ending 5 April 2021 was submitted electronically. It indicated that the Appellant was in receipt of employment income and that tax was due in the sum of £2,012.00.[21]On 8 April 2021, the Appellant telephoned the Respondents as self-employed income had been declared as PAYE income in the 2020/21 Tax Return. The Appellant was advised that an amendment was required. Thereafter, an individual, who cleared the security verification process, rang back requesting assistance with amending the 2020/21 Tax Return. Three amendments were made. First indicating an overpayment of £641.40, Second, indicating an overpayment of £800. Third, indicating an overpayment of £2,046.60.[22]On 12 April 2021, the Appellant made two calls to HMRC requesting the overpayment generated by the 2020/21 Tax Return.[23]On 13 April 2021, HMRC received a telephone call requesting the overpayment shown in the 2020/21 Tax Return. The Respondents call handler noted that the caller did not sound like the Appellant, but dealt with the query as the security verification process was passed.[24]Between 19 April and 3 June 2021, the Respondents received 28 telephone calls and Webchats from the Appellant (or someone purporting to be the Appellant) pursuing the 2020/21 repayment. On at least 5 occasions, the call handler suspected that, despite passing security, the caller was female and not the Appellant. On 20 May 2021, the caller admitted that they were the Appellant’s partner. On 26 May 2021, the Appellant authorised his partner to discuss the repayment with the Respondents.[25]On 3 June 2021, the Appellant submitted an online complaint about the Respondents failure to issue the 2020/21 repayment.[26]Between 4 June and 8 July 2021, the Appellant contacted the Respondents 15 times via Webchat chasing the repayment.[27]On 8 July 2021, the Respondents contacted the appellant in response to the complaint and advised that the repayment would be issued shortly.[28]On 14 July 2021, a repayment of £2,061.40 (including £15 from an earlier year) was deposited in the Appellant’s Santander bank account.[29]On 7 March 2022, the Appellant submitted a further amendment to the 2020/21 Tax Return generating an additional overpayment of £689.90.[30]On 15 March 2022, a repayment of £690.40 (including a small amount of repayment supplement) was deposited in the Appellant’s bank account.[31]In summary, the Appellant submitted the following amendments to the 2020/21 Tax Return: Version 2 £ Version 3 £ Version 4 £ Version 5 £ Closure Notice £ Turnover 8,000 4,000 16,000 25,000 15,662 Expenses 1,000 1,000 1,000 1,000 1,000 CIS Tax 800 800 3,200 6,500 3,132 Overpaid 641.40 800 2,046.60 2,736.40 2,076.92 ii). Tax Year ending 5 April 2022[32]On 6 April 2022, the Appellant submitted an electronic Self-Assessment Tax Return for the year ended 5 April 2022 indicating an overpayment of tax in the sum of £2,183.12.[33]Between 8-19 April 2022, the Appellant contacted HMRC via Webchat on 13 separate occasions pursuing the repayment.[34]On 19 April 2022, a repayment of £2,024.52 was issued to the Appellant’s bank account.[35]On 21 April 2022, the Appellant submitted an amendment to the 2021/22 Tax Return increasing the overpayment to £8,256.52. This repayment was not issued following additional security checks. Version 1 £ Version 2 £ Version 3 £ Version 4 £ Closure Notice £ Turnover 28,80 0 28,80 0 39,00 0 39,00 0 11,99 7 Expenses 4,00 0 4,00 0 15,00 0 15,00 0 2,39 9 CISTax 6,00 0 6,00 0 12,00 0 12,00 0 1,97 3 Overpaid 2,183.12 2,024.52 8,256.52 8,256.52 1,811.97[36]In June 2022, the Appellant provided documentation, including bank statements for the period 6 April 2021 to 5 April 2022, confirming his identity and completed a questionnaire in respect of the 2021/22 Tax Return. He confirmed, among other things, that he personally completed the 2021/22 Tax Return. He did not receive any help completing it. HMRC or Government Gateway user ID’s and passwords had not been given to anyone else to facilitate submission of the Tax Return. The figures in the Tax Return were correct. He had not authorised any third-party to receive a repayment on his behalf. An amendment to the Tax Return was made because the original submission was rushed and expenses were higher than first thought.[37]On 21 July 2022, the Respondents opened enquiries under s.9A Taxes Management Act 1970 into the amendment to the 2020/21 Tax Return and the 2021/22 Tax Return. No enquiry was opened into the 2019/20 Tax Return.[38]Between 22 – 25 July 2022, the Appellant contacted the Respondents via Webchat on 5 occasions pursuing the additional 2021/22 repayment.[39]On 25 July 2022, in response to the notices of enquiry, the Appellant contacted the Respondents advising that he did not hold any business records but had previously supplied identification and bank details.[40]On 26 July 2022, the Appellant telephoned the Respondents advising that his partner (Gillian) had been dealing with his Self-Assessment Tax Returns and that documents and information had already been submitted. In response, the Respondents requested receipts and invoices.[41]On 27 July 2022, the Appellant emailed the Respondents stating that any invoices were lost in a house move in February. In reply, the Respondents reminded the Appellant of the legal requirement to retain records and provided factsheets CC/FS7a – Penalties for inaccuracies in returns and documents and CC/FS9 – The Human Rights Act and penalties.[42]Between 1 – 10 August 2022, the Appellant contacted the Respondents 5 times via Webchat chasing the 2021/22 repayment.[43]On 10 August 2022, the Respondents proposed that, in the absence of any contrary evidence, amendments should be made to the 2020/21 and 2021/22 Tax Returns to reflect the Construction Industry Scheme (CIS) records held by the Respondents. On 15 August 2022, the Appellant agreed and queried if any further repayment was due.[44]On 26 August 2022, the Respondents emailed the Appellant warning of potential penalties. In reply, the Appellant stated that the errors were not his fault as somebody else completed the Tax Returns.[45]On 12 September 2022, the Respondents wrote to the Appellant warning of penalties under Schedule 24 Finance Act 2007.[46]On 19 October 2022, the Respondents issued closure notices under S.28A Taxes Management Act 1970 for the years ended 5 April 2021 and 5 April 2022.[47]On 20 October 2022, the Respondents issued penalty determinations under Schedule 24 Finance Act 2007 for the years ended 5 April 2021 and 5 April 2022 in the sum of £2,735.11.[48]On 28 October 2022, the Appellant appealed the closure notices and the penalties to the Respondents on the ground that a third party who did not know what they were doing completed the Tax Returns on the Appellant’s behalf. Also, the Appellant confirmed that records had never been kept.[49]On 2 November 2022, the Respondents wrote to the Appellant requesting further documents and information.[50]On 16 November 2022, the Appellant emailed the Respondents with a further appeal against the closure notices and the penalties. The Appellant agreed the figures in the absence of “…proof of receipts or invoices for anything or personal expenses…” he also advised that his partner (Gillian) had previously completed Tax Returns on his behalf but in this instance they were submitted by someone else.[51]On 25 November 2022, the Respondents stated that there was no information justifying a change to the closure notices.[52]On 29 November 2022, the Appellant emailed the Respondents advising that his partner (Gillian) completed some but not all of the Tax Returns. The third party who completed the remainder could no longer be contacted following a falling out.[53]On 12 December 2022, the Respondents issued a view of the matter letter (“VML1”), including an explanation of the process for appealing to the Tribunal.[54]On 14 December 2022, the Appellant emailed the Respondents asking for the matter to be referred to the Tribunal.[55]On 23 December 2022, the Respondents issued a further view of the matter letter (“VML2”) which, again, explained the process for appealing to the Tribunal.[56]On 16 February 2023, in the absence of either a request for a statutory review or an appeal to the Tribunal, the Respondents wrote to the Appellant confirming that the matter had been settled by agreement in accordance with S.54(1) Taxes Management Act 1970.[57]On 3 March 2023, the Appellant appealed to the Tribunal.[58]On 19 May 2023, the Appellant emailed the Respondents stating that “…I was conned my (sic) someone I trusted I paid them and lost the money as they did a runner…” and that he was never provided with any documents by the contractor.[59]On 12 January 2024, the Tribunal issued directions. On 19 February 2024, the Tribunal wrote to the Appellant noting his failure to comply with those directions.

The Law

(i) Statute

[60]Schedule 24 of the Finance Act 2007 (“FA 07”) provides, so far as relevant, as follows.[61]Paragraph 1 Sch 24 FA 07 states:
“1(1) A penalty is payable by a person (P) where– (a) P gives HMRC a document of a kind listed in the Table below, and (b) Conditions 1 and 2 are satisfied. (2) Condition 1 is that the document contains an inaccuracy which amounts to, or leads to– … (c) a false or inflated claim to repayment of tax. (3) Condition 2 is that the inaccuracy was careless (within the meaning of paragraph 3) or deliberate on P’s part… Tax Document Income tax or capital gains tax Return under section 8 of TMA 1970 (personal return). …”
[62]Paragraph 3, Sch 24 FA 07 considers ‘Degrees of Culpability’:
“ 3(1) For the purposes of a penalty under paragraph 1, inaccuracy in a document given by P to HMRC is–… “(b)deliberate but not concealed” if the inaccuracy is deliberate on P's part but P does not make arrangements to conceal it, …”
[63]Paragraph 4, Sch 24 FA 07 sets out the standard amount of the penalty payable under Paragraph 1, Sch 24 FA 07 as “ …4(2) If the inaccuracy is in category 1, the penalty is– … (b) for deliberate but not concealed action, 70% of the potential lost revenue, and…” The inaccuracy in this case is in category 1 as it is a domestic matter within Paragraph 4A (1) (a) & 4A (5), Sch 24 FA 07. The potential lost revenue (“PLR”) is defined by Paragraphs 5-8, Sch 24 FA 07. Paragraphs 9-10, Sch 24 FA 07 sets out reductions for disclosure.[64]Paragraph 11, Sch 24 FA 07 gives HMRC a discretion to reduce a penalty where there are special circumstances:
“11(1) If they think it right because of special circumstances, HMRC may reduce a penalty under paragraph 1, 1A or 2. 11(2) In sub-paragraph (1) “special circumstances” does not include– (a) ability to pay, or (b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another. 11(3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to– (a) staying a penalty, and (b) agreeing a compromise in relation to proceedings for a penalty.”
[65]Paragraph 15, Sch 24 FA 07 sets out a party’s appeal rights as follows:
“15(1) A person may appeal against a decision of HMRC that a penalty is payable by the person. 15(2) A person may appeal against a decision of HMRC as to the amount of a penalty payable by the person…”
[66]Paragraph 17, Sch 24 FA 07 sets out the Tribunal’s powers on appeal:
“17(1) On an appeal under paragraph 15(1) the tribunal may affirm or cancel HMRC's decision. 17(2) On an appeal under paragraph 15(2) the tribunal may– (a)affirm HMRC's decision, or (b)substitute for HMRC's decision another decision that HMRC had power to make…”
[67]In Commissioners for HMRC v Tooth [2020] UKSC17 (“Tooth”), the Supreme Court set out a test to establish deliberate behaviour in the context of discovery provisions. However, at paragraph 27, the Supreme Court noted that “…broadly similar differential treatment of careless and deliberate conduct by the taxpayer is reflected in different levels of penalty which may be imposed. The penalty scheme is contained in Schedule 24 to the Finance Act 2007.” Accordingly, the deliberate behaviour test established in Tooth is applicable when considering deliberate behaviour under Sch 24 FA 07. At paragraphs 42 – 46 of Tooth, the Supreme Court noted that for behaviour to be deliberate a statement must be shown to have been deliberately inaccurate at the time it was made. Further at paragraph 47, the Supreme Court stated “…that, for there to be a deliberate inaccuracy in a document … there will have to be demonstrated an intention to mislead the Revenue on the part of the taxpayer as to the truth of the relevant statement or, perhaps, (although it need not be decided on this appeal) recklessness as to whether it would do so.”

The Parties’ Positions:

[68]The Appellant’s Grounds of Appeal state:
“Iam appealing the penalty for the tax period 6/04/20 to 5/4/21 the penalty is £253.89 and also the penalty for the tax period 6/4/21 to 5/4/22 the penalty is £2,481.22 l dont think l should have to pay these due to reasons l have give HMRC. The reasons were that l didnt file these tax returns myself l got someone to to do this as they were recommended to me my a friend l am not good at reading and writing or maths as l would of filed them myself l trusted this person l payed then a fee for doing these returns what l thought were right l have been conned by this person thinking they were doing everything by the book l let this person file my 6/04/21 to 5/4/22 tax return as l thought everything was ok with the 6/4/20 to 5/4/21 tax return l only knew they wasnt right when l recived a letter from HMRC stateting that they wrong and they was going to issue me a penalty notices.”
[69]It is the Respondents’ position that:(1) The Appellant submitted Self-Assessment Tax Returns and amendments for the years ended 5 April 2021 and 5 April 2022 knowing the figures to be incorrect.(2) Inaccurate Tax Returns were submitted with the purpose of obtaining excessive repayments of tax.(3) The Appellant’s actions in submitting incorrect Tax Returns were deliberate.[70]Accordingly, the Respondents invite us to affirm HMRC’s decision to charge penalties under Schedule 24 FA 2007 for the years ended 5 April 2021 and 5 April 2022 in accordance with Paragraph 17(1) FA 2007 and dismiss the appeal.

Analysis & Decision:

(i) Late Appeal

[71]In Martland v HMRC [2018] UKUT 178 (TCC) at §44, the Upper Tribunal held that when considering applications for permission to appeal out of time the Tribunal can follow the three-stage process established in Denton and Ors v TH White Limited and Ors [2014] EWCA Civ 9.[72]The first stage is to establish the length of the delay which involves identifying the breach. Thereafter, we are required to assess the seriousness and significance of that breach. The breach in question is the Appellant’s failure to appeal the Penalties by 12 January 2023. The Appellant appealed on 3 March 2023, being 50 days after the deadline. We consider that the delay, whilst relatively short, is nonetheless serious and significant. Whilst relatively short, the delay is measurable in months, approximately 1.5 months not a mere handful of days.[73]The second stage requires us to establish and evaluate the reason or reasons why the default occurred. On 19 October 2022, the Closure Notices were issued. On 20 October 2022, the Penalties were issued. On 28 October 2022, the Appellant emailed the Respondents stating that he wanted to appeal. On 2 November 2022, the Respondents acknowledged the appeal. On 16 November 2022 and 29 November 2022, the Appellant emailed the Respondents reiterating his wish to appeal. On 12 December 2022, the Respondents issued VML1, which set out the Appellant’s appeal routes. On 14 December 2022, the Appellant emailed the Respondents stating, “I would like a independent tribunal please.” The Respondents did not write back informing the Appellant that he would need to pursue such an appeal via the First-Tier Tax Tribunal. Instead on 23 December 2022, VML2 was issued. The Appellant, in his Notice of Appeal, states that he did not receive this letter. We note that the letter itself does not have the Appellant’s address, albeit VML1 did not have his address either and he received VML1. It was only following receipt of the closure letter, dated 16 February 2023, that the Appellant issued this appeal on 3 March 2023. We consider that at all times the Appellant informed the Respondents that he wished to appeal. The Appellant was confused as to who to appeal to and how to do so, as evidenced by his email to the Respondents stating that he wanted to appeal to an Independent Tribunal. We have had regard to the fact that the Appellant has difficulties with reading and writing. We note that, unfortunately, the Respondents did not respond to the Appellant’s email dated 14 December 2022. We also accept that the Appellant did not receive VML2 as, if he had, we consider that he would have taken steps, consistent with his position, to appeal to the Tribunal, as he did after receiving the letter dated 16 February 2023. In all the circumstances, we consider that the Appellant has a good reason for the delay.[74]The third stage requires us to consider all the circumstances of the case. This involves a balancing exercise taking into consideration the merits of the reasons for the delay, the prejudice caused to both parties by granting or refusing permission, the importance of complying with statutory time limits and the need for finality of litigation. In addition, we can have regard to the strengths or weaknesses of the Appellant’s case as this goes to the question of prejudice. However, we are not required to conduct an in-depth analysis of the underlying merits.[75]We have conducted the required balancing exercise taking into consideration all of circumstances of the case. We consider that the Appellant has a good reason for the delay. We note that refusing permission to appeal would prevent the Appellant from appealing the Penalties. Whilst not determinative, we also note that the Respondents do not object to the late appeal and do not suggest that they are prejudiced by it. We have also had regard to the importance of complying with statutory time limits and the need for finality of litigation. We have reminded ourselves that permission should not be granted unless we are satisfied on balance that it should be. We have concluded that permission to appeal out of time should be granted. ii). Deliberate[76]The Appellant’s 20/21 Tax Return and the 21/22 Tax Return (“the Returns”) contained inaccuracies amounting to or leading to a false or inflated claim to repayment of tax, Paragraph 1(1) (a) and (1) (2), Sch 24 FA 07. The main issue for our determination is whether or not the inaccuracies were deliberate on the Appellant’s part, Paragraph 1 (3), Sch 24 FA 07. We have reminded ourselves of the test in Tooth. We are satisfied that the Appellant intended to mislead the Respondents as to the truth of the relevant statements in the Returns at the time they were made with the purpose of obtaining excessive repayments of tax. In reaching this decision, we have specifically considered the Appellant’s difficulties with reading and writing. We have referred to and relied on the following points: (1) As to the 19/20 Tax Return, the Appellant had raised concerns about fraud and, accordingly, understood the process to follow if he had such concerns. He did not raise any such concerns in respect of the 20/21 and/or 21/22 Tax Returns.(2) Despite his experience with the 19/20 Return, the Appellant, who had been advised to change his Self-Assessment password following the problems with the 19/20 Tax Return, gave his login details to his partner Gillian. In addition, he was required to authorise her access via his mobile phone. Accordingly, he was fully aware that Gillian was liaising with the Respondents.(3) The Appellant has been inconsistent as to who completed the Returns. In May 2022, he stated that he completed the 21/22 Return without help, that he hadn’t given his usernames to anyone and that the figures were correct. On 26 July 2022, he stated that Gillian had dealt with the 21/22 Return. Upon being warned about penalties, on 26 August 2022 he stated that a Third Party was responsible for the errors. On 28 October 2022, he stated that a Third Party who had not known what he was doing had completed the Return. On 16 November 2022, he stated that Gillian had previously completed his Tax Returns, but a Third Party had done this one. On 29 November 2022, he stated that Gillian had completed some, but not all of the Tax Return and a Third Party, who could no longer be contacted due to a fall out, completed the remainder. On 19 May 2023, he stated that he was conned by someone he trusted who did a runner after he paid him. Whilst we accept that the Appellant had some assistance from Gillian, we do not accept that he paid a Third Party in respect of either the 20/21 or 21/22 Returns. We note that the repayments were received in full into the Appellant’s account and there is no evidence in the Appellant’s bank statements to show payment to a third party. We also note that a Third Party was not mentioned until the Respondents raised the possibility of penalties. Accordingly, we find that the Appellant completed the Returns, with some assistance from Gillian, and submitted the Returns to the Respondents.(4) The Appellant has also been inconsistent as to whether or not he retained business records, as he was legally required to do. On 25 July 2022, he stated that he did not hold any. On 27 July 2022, he stated that invoices were lost in a house move in February. On 28 October 2022, he stated that he never kept records. On 16 November 2022, the Appellant agreed the Respondents proposed amended figures in the absence of “…proof of receipts or invoices for anything or personal expenses…” On 19 May 2023, he stated that he was not provided with CIS documents. Accordingly, the Appellant did not have any documentary evidence on which to base the figures included in the Returns. He must have known that this was the case. He could have sought to check his figures against his bank statement. He did not do so. We consider that he knew (or closed his eyes to the fact) that had he cross checked it would have been clear that the figures in the Returns were unsupported. Further or alternatively, to the extent that the Appellant had ‘assistance’ from Gillian (or, contrary to our finding, an unknown Third Party) then he had no business records to give to them and, consequently, he knew that there was no basis for the statements in the Returns or turned a blind eye to the basis for such statements.(5) There were multiple amendments in ever-increasing amounts to the Returns. In the absence of any records, the Appellant must have known (or closed his eyes to the fact) that the figures were excessive and inaccurate.(6) The Appellant and/or Gillian chased for the repayments on multiple occasions, both via telephone and Webchat, and, in fact, made an online complaint about the Respondents’ failure to repay the sums. These chasers continued after the opening of the s.9A Taxes Management Act 1970 enquiry.(7) On 14 July 2021, 15 March 2022 and 19 April 2022, the repayments were made directly to the Appellant’s Santander account. He received these sums without query.[77]In all the circumstances, we are satisfied that the inaccuracies were deliberate on the Appellant’s part. We dismiss the appeal.

Right to apply for permission to appeal

[78]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. JENNIFER NEWSTEAD TAYLOR TRIBUNAL JUDGE Release date: 27th FEBRUARY 2025