Liquorstop Convenience Store v The Commissioners for HMRC [2025] UKFTT 371 (TC)

[2025] UKFTT 00371 (TC)Case No TC09465
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 19 March 2025Date Judgment date: 27 March 2025
By remote video hearing
Appeal reference: TC/2023/08717
Late Appeal – Martland applied
Before
TRIBUNAL JUDGE HOWARD WATKINSON
Between
LIQUORSTOP CONVENIENCE STOREAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr. Sandeep Sallan of SPS Accounting Ltd for AppellantMiss Natalie Owen, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]With the consent of the parties, the form of the hearing was video. Mr. Sallan and Miss Owen attended over Teams. The documents to which I was were referred were in a hearing bundle of 542 pages.[2]Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.[3]The Appellant, by way of an application included in its Notice of Appeal stamped as received by the Tribunal on 5.6.23, seeks permission to commence a late appeal against the Respondents’ VAT Assessment, first notified on 4.9.19 for £138,794.00, covering VAT periods 10/15 to 05/19 (inclusive), and amended on 10.9.19 to £121,660.30.

FACTS

[4]On 26.9.19 the Appellant’s agent emailed HMRC explaining that he disagreed with the VAT Assessment and confirming this was an “official notice of appeal”. HMRC replied on the same date:
“I have noted your comments about the appeal, but I believe if you can review the data and come back to me with any calculations or comments before we proceed to the next stage. Your appeal rights will not be last [sic] at this stage.”
[5]On 21.10.19 the Appellant’s agent emailed HMRC requesting that the Officer amend the VAT Assessment.[6]On25.10.19 HMRC emailed the Appellant’s Agent asking for further information from Agent and saying “…if you could provide documentation to substantiate the claim, I will be happy to amend the assessment.”[7]On 13.12.19 HMRC emailed the Appellant’s Agent chasing for a response and saying “I have not heard anything back from yourself, so I wanted to know whether you wanted me to initiate the Independent Review.”[8]On 16.12.19 the Appellant’s Agent replied to HMRC to confirm that information needed to be obtained.[9]On 8.6.20 HMRC emailed the Appellant’s Agent to enquire if he wanted an independent review, including of the VAT assessments. On 10.6.20 the Appellant’s Agent replied to HMRC saying that he had not received any letter relating to the original VAT assessment.[10]On 11.6.20 HMRC re-issued documentation to the Appellant’s Agent, which included the original and amended VAT assessment, and said in the covering email “…. The only reason I had contacted you was to see if you would like to go ahead with the Independent Review that you had requested.”[11]On 23.6.20 the Appellant’s Agent asked HMRC to pause compliance activity in light of the Covid-19 pandemic.[12]On23.7.20 the Appellant’s Agent confirmed that he would re-start work from 10.8.20.[13]On27.1.21 HMRC emailed the Appellant’s Agent, again chasing for information, and saying “Further to our last conversation, I was wondering if you had a chance to send over your calculations for the VAT assessment. If I do not receive these within by the 3rd February [sic], I will close my VAT enquiry assuming your client is satisfied with satisfied the assessment.”[14]On28.1.21 the Appellant’s Agent replied and asked for another extension of time, which was granted HMRC on 8.2.21.[15]On15.3.21 there was a reply from the Appellant’s Agent which included a revised Assessment calculation. On 23.3.21 HMRC emailed the Appellant’s Agent providing the facility to provide more information to support the Appellant’s revised calculations. No response was received from the Appellant’s Agent.[16]On25.5.21 HMRC sent a further email to the Appellant’s Agent providing the relevant link to provide the information. No response was received.[17]On 8.7.21 HMRC telephoned the Appellant’s Agent.[18]On 10.10.22 the Appellant’s Agent emailed HMRC in direct response to a visit from a debt management officer to the Appellant. HMRC responded on 18.10.22 saying:
“Further to your email last week, I did provide with you a link to Dropbox but this went unused on 25/05/21. Furthermore, I did try to chase you up after this but could not get through….”
[19]On 6.12.22 a pre-agreed visit that was arranged between the two parties was cancelled at the Appellant’s Agent’s request.[20]On23.1.23 a new decision maker for HMRC, who had taken over the case, wrote to the Appellant’s Agent to request the information and pointed out that the Appellant’s appeal rights had expired over 3 years previously, saying “A VAT assessment was raised, by Officer Rauf, on the 30/09/2019, within the Notice of Assessment and our guidelines its clearly states that your client would have 30 days to request a review or appeal to the tribunal. At the time of writing this letter it has been over 3 years since the VAT assessment was raised.I refer to your email dated 10/10/2022 (3 years after the notification of assessment) in which you state you would like to provide further information. A dropbox facility was arranged for you to submit the information but this was not utilised and consequently the information has not been received. If this information has not been received within 21 days of the date of this letter, by the 14/02/2023, I will close the case.Failure to submit the information by the 14/02/2023, and you wish for the information to be considered [sic], you will be required to make a formal request for a review or apply to the tribunal for a later appeal. Details on how to do this can be found on our website.”[21]On 14.2.23 the Appellant’s Agent called HMRC and asked for a further extension of time for any new information be submitted. HMRC agreed the extension of time on 15.2.23 saying:
“If I have not received all of the required information by the 8th March 2023, you will be required to submit a formal late review/appeal request to the assessment [sic].”
[22]On 8.3.23 the Appellant’s Agent provided HMRC with documents to support his contention that the VAT assessment should be reduced.[23]On 15.3.23 HMRC requested further information from the Appellant’s Agent. On 16.3.23 the Appellant’s Agent responded and said the information would be forwarded in due course. This was acknowledged by HMRC on 21.3.23.[24]On20.4.23 HMRC issued a letter to the Appellant saying:
“My last communication with your accountant was on the 21st March 2023, in which I requested further information. The deadline set for the further information to be provided was the 29th March 2023, at the time of sending this letter I have not received the requested information. I refer to the VAT assessment raised by Officer Rauf on the 30/09/2019, within the Notice of Assessment it clearly states that you had 30 days to request a review or appeal to the tribunal. At the time of writing this letter its has been [sic] over 3 years 6 months since the VAT assessment was raised. Due to the time elapsed I would like to advise you that you will now be required to submit a formal request for a late review or appeal to the tribunal.”
[25]The Appellant sent a Notice of Appeal to the Tribunal, signed on 17.5.23, which was stamped as received on 5 June 2023.

SUBMISSIONS

[26]Mr. Sallan submitted that the application to make a late appeal should be permitted because:(1) HMRC had allowed hardship in this appeal to they could not object to it being late;(2) The length of delay was initially 3 ½ years because of a combination of: the Appellant’s director’s husband having a serious accident in January 2021, the Covid-19 pandemic in 2020 and his own hospitalisation with Covid-19;(3) It was not clear what information HMRC deemed to be acceptable;(4) The Appellant considered that the time limits for appeal started to run from the letter of 20.4.23;(5) The Appellant would have sent the Notice of Appeal itself but there was no information as to when the Notice of Appeal was posted, who posted it or how it was posted, and there were delays at the Tribunal.[27]Miss Owen submitted that the application to make a late appeal should be refused because:(1) The time period for appeal started from the initial assessment and so the delay was more than 3 ½ years and is serious and significant;(2) The Appellant had not fully co-operated with HMRC and there is no good reason for the default; and(3) HMRC would be prejudiced by a denial of finality.

THE LAW

[28]The basic approach to applications for permission to make late appeals is well established. In William Martland v HMRC [2018] UKUT 178 (TCC) (“Martland”), at [44]- [46], the Upper Tribunal said that:(1) In considering applications for permission to appeal out of time, it must be remembered that the starting point is that permission should not be granted unless the FTT is satisfied on balance that it should be;(2) The FTT can usefully follow the three-stage process in Denton;(3) At the third stage, the balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected. The FTT’s role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist; and(4) In doing so, the FTT can have regard to any obvious strength or weakness of the applicant’s case; this goes to the question of prejudice – there is obviously much greater prejudice for an applicant to lose the opportunity of putting forward a really strong case than a very weak one. It is important however that this should not descend into a detailed analysis of the underlying merits of the appeal.[29]In Denton v TH White Ltd (and related appeals) [2014] EWCA Civ 906 the Court of Appeal had set out a three-stage test for relief from sanction applications at [25] – [31]:(1) The first stage is to identify and assess the seriousness or significance of the failure to comply with any rule, practice direction or order. If the breach is not serious or significant then relief from sanctions will usually be granted and it will usually be unnecessary to spend much time on the second or third stages. If, however, the Tribunal decides that the breach is serious or significant, then the second and third stages assume greater importance;(2) At the second stage the Tribunal should consider why the failure or default occurred;(3) At the third stage the Tribunal should consider "all the circumstances of the case, so as to enable it to deal justly with the application".

Discussion

[30]I do not accept that HMRC’s acceptance of hardship in this case is of any particular weight. It is for the Tribunal to determine whether the late appeal should be allowed. In any event, I was not taken to any evidence that the decision maker in relation to hardship was aware that the appeal was late.[31]This Notice of Appeal should have been filed within 30 days of the date of the original assessment notified on 4.9.19 (s.83G Value Added Tax Act 1994). The Notice of Appeal received on 5.6.23 was more than 3 ½ years out of time. That is both a serious and significant delay in my judgment. Even taking a more generous (and legally incorrect) view that based on HMRC’s correspondence the 30-day period effectively started to run from 20.4.23 the Notice of Appeal was still not received within 30 days but was instead16 days late. In the circumstances of this case, in my judgment that delay of 16 days in filing the Notice of Appeal in the context of a 30-day statutory time would also be both serious, and significant. It is late by more than an extra 50% of the appeal time limit even construed as starting on 20.4.23, in a context where HMRC had repeatedly chased for information and confirmation of whether an independent review was required and repeatedly provided extensions of time.[32]At the second stage I find that there was some explanation for the delay until 20.4.23, since HMRC gave the impression of being willing to undertake a review, and there was the intervention of the Covid-19 pandemic. However, there were also large periods of time in 2021 – 2022 as set out above where there were significant unexplained delays. Overall, I find that there was no good reason for the entire period of delay prior to 20.4.23. I also find that there is no cogent or credible explanation for the delay after 20.4.23, because there is no explanation for the delay at all. The Notice of Appeal was signed on 17.5.23 – yet it was not received until 5.6.23. There is no evidence of when it was posted, who posted it, or how. If it had been sent on 17.5.23 it should, as the Appellant accepts, have arrived well in time. Overall I find that there is no good reason for the cumulative delay of more than 3 ½ years in notifying the appeal.[33]At the third stage, in the balancing exercise, I 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. I view neither party’s case as obviously stronger than the other. Standing back and looking at all the circumstances I conclude that the application to permit the late appeal should be refused.

Decision

[34]The application to make a late appeal is dismissed.

Right to apply for permission to appeal

[35]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. Release date: 27th MARCH 2025