Ved Parkash v The Commissioners for HMRC [2025] UKFTT 544 (TC)

[2025] UKFTT 00544 (TC)Case No TC09523
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 01 May 2025Date Judgment date: 16 May 2025
By remote video hearing
Appeal reference: TC/2018/02557
LATE APPEAL - application to relieve Applicant of failure to comply with a time limit - whether Applicant can appeal out of time – no – application to have a ‘struck out’ appeal reinstated - objection by HMRC - whether ‘struck out' appeal can be reinstated – no –Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009/273, Rules 2, 7 and 8 - Applications refused.
Before
TRIBUNAL JUDGE RUTHVEN GEMMELL WSNASREEN HUSSAIN
Between
VED PARKASHAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondent for Applicant/Appellant: Philip Simpson KC, instructed by Nisbets Solicitors (“counsel for the Appellant”)Elizabeth Roxburgh, Advocate, instructed by the Office of the Advocate General for Scotland, (“counsel for HMRC”) for RespondentsDECISION

Introduction

[1]With the consent of the parties, the form of the hearing was by video and attended by all participants remotely on the Teams video hearing system. The documents to which the Tribunal (“we/the tribunal”) were referred to were contained in a Joint bundle of documents comprising of 298 pages, a further three supplementary bundles of 5,9 and 2 pages respectively, an Authorities Bundle of 138 pages and Skeleton Arguments from both parties.[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 to observe the proceedings. As such, the hearing was held in public.[3]Applications on behalf of the Applicant/Appellant, Ved Parkash (“the Appellant/VP”), were made by email on 28 March 2024, and followed up by a letter in similar terms on 1 April 2024.[4]The applications are(1) for relief from the failure to make an application within 28 days of an order dated 15 January 2024 (“the Strike Out Order”) following the failure to comply with a Direction (“the Unless Order”) made on 19 December 2023, (“the Time Limit application”) and(2) to have VP’s appeal reinstated (“ the Reinstatement application”) under Rules 8(6) and 8(5), respectively, of the Tribunal Procedure (First-Tier Tribunal) (Tax Chamber) Rules 2008 (“the Tribunal Rules”).[5]The amount of the assessment which is the subject of the appeal is thought to be in excess of £1 million but the quantum may be different depending on whether assessments in relation to the period prior to the declaration of VP’s bankruptcy in 2010 are or are not included. The figure detailed in a letter by VP’s accountant, Roshon Singh (“RS”), of ABC, Accounting Business Consultants (“ABC”), to HMRC on 08 February 2024 referred to £598,063.90 against which VP asked HMRC to consider a full and final settlement offer of £300,000 to bring the matter to closure.[6]HMRC objected to both applications.

Legislation – Tribunal Rules

[7]Sece Appendix A.

Authorities Referred To

[8]See Appendix B.

Evidence and Facts

[9]We had a written witness statement from VP and he was also able to give oral evidence. He was examined and cross examined.[10]The oral evidence given by VP was unsatisfactory to the extent that in answer to a great many questions he was unable to remember facts and specifically dates in relation to when various actions were alleged to have taken place.[11]VP confirmed the status of his written witness statement as a record of the truth but on certain matters this was contradicted by his oral evidence. This adversely affected our assessment of the credibility of VP’s evidence.[12]The email of 28 March 2024, submitted by RS, set out the reasons why VP wished to lodge a late appeal and apply for the proceedings to be reinstated as follows:• “The appellant is a vulnerable member of the community, who is very unwell and partially blind.• The previous Solicitor acting was not communicating with the appellant on a timely manner.• He was demanding upfront fees from the appellant and was threatening to drop the case.• On the last hour he ceased to act with no notice and no instruction.• The appellant is now in the process of appointing a new Solicitor to take this case to the Tribunal.”[13]The Appellant who suffers from Crohn’s disease and has other related health issues was admitted to hospital on 18 December 2024 for three nights, which he referred to as a ‘lengthy period’ in hospital. He was told to take rest on his return home.[14]This date was significant because it was on 19 December 2023 that the Direction was made by the tribunal. In his witness statement of 15 April 2025, VP stated he was not aware of the Unless Order nor its requirements nor the consequences of any failure to adhere to it. In his Witness Statement VP referred to his appeal being ‘struck out by order of the Tribunal on 10 January 2024 following the failure to comply with an UNLESS order made by the Tribunal on 19 December 2023.’[15]In his oral evidence, however, VP stated that he was aware of the Unless Order of 19 December 2023 but did not know when he became aware of it. Emails confirmed that VP had, on 15 January 2024, via his son’s email account, instructed RS to consider the Strike Out Order of the same date and that he subsequently discussed the Strike Out Order with RS.[16]In his oral evidence, VP stated that the reason it took so long to appeal against the Strike Out for failure to comply with the directions of 19 December 2023, was because he was looking to engage a lawyer to make the appeal.[17]VP stated that he recalled making contact with the Law Society of Scotland who provided some names, and he approached Balfour and Manson, Solicitors, but he could not find a lawyer who was able to act for him in making the appeal within 28 days. In the event the appeal was made by his accountants, ABC by email of 28 March 2024.[18]VP stated that he recalled discussing the Strike Out Order at a meeting with RS on 24 January 2024 but could not remember the details. This meeting was summarised in an email by the RS who wrote to HMRC on 8 February 2024. This set out why VP did not believe the assessments were correct but noted that he wished to bring the matter to a quick resolution having been, he felt, misguided by his previous professional advisers for over a decade.[19]In response to the question of why he had not confirmed whether or not he intended to proceed with his appeal and, if so, if he was represented and, if so, by whom, VP stated that he had left this matter with RS.[20]We were taken to a series of emails from MBS Solicitors (“MBS”), VP’s previous solicitors, who had declined to act for him on the basis that “you have showed complete reluctance to provide any cooperation” and because VP would not make payment, in advance, of fees and outlays which MBS set out would be incurred if the case progressed further.[21]VP stated that he always paid bills when they were presented but was not willing to make payment in advance to his solicitors and did not accept that his solicitor should cease to act if they were not paid in advance.[22]VP stated that, in any event, he did not have the funds required to pay MBS ‘upfront’ at that time but that he had always paid his legal fees when an invoice had been presented if necessary borrowing from his family.[23]MBS also required up-to-date accounts so that they could take matters forward. VP denied that he had not provided his solicitors with sufficient cooperation.[24]VP had stated that MBS had provided a substandard service and had failed to properly communicate with him but emails to him, from MBS, between 16 November 2023 to 11 December 2023 set out quite clearly what MBS intended to do and what steps should be taken to progress VP’s case.[25]Finally, in December 2023, when MBS decided that they were no longer willing to act, they set out clear steps as to what should happen next, including VP contacting the Law Society of Scotland to assist in the appointment of replacement solicitors. The emails also gave clear notice to VP that they were ceasing to act.[26]The correspondence from MBS showed that they were communicating with VP and RS about the appeal against HMRC and that they were demanding upfront fees given the risks involved, as they saw it, in the proposed litigation and the consequent liability for their own and counsel’s fees.[27]MBS had given notice to VP of their reasons for advising of their intention to withdraw from acting on 17 November 2023 which was followed on 11 December 2023 by an email formally doing so and advising that relevant parties had been so advised. This series of correspondence was in contradiction to VP’s statement where he stated he was not aware of MBS solicitors withdrawing from acting for him until “sometime later in 2024”.[28]VP stated that he had asked his accountant, RS, to act on his behalf in negotiating with HMRC who sought to serve VP’s interests in discussion with them in the period January to May 2024.[29]VP said he was not, however, aware of the detail of these negotiations which were ongoing on his behalf nor that RS had suggested, on his behalf, settling for £300,000.[30]We had a number of letters from VP’s medical consultant in relation to his unfortunate illness but it was established during the hearing that VP had capacity to give instructions on a number of occasions and HMRC made the distinction between being well enough to give evidence and being well enough to give instructions.[31]We were also directed to the occasion in 2023, when a Judge in the Court of Session had required VP to give evidence, which he did, at a time when he was telling HMRC that he did not have the capacity to give instructions or give evidence. In addition senior counsel had been instructed in at least one court and one tribunal hearing and could only so act, in the absence of a curator ad litem or possibly an attorney for which there was no evidence, if VP had been able to instruct them. HMRC’S Submissions Introduction And Orders Sought

HMRC’S Submissions

[32]VP is seeking two separate, but related, reliefs from sanction.[33]The first is relief from the sanction imposed under Rule 8(6) Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009/273 (the “Tribunal Rules”). That rule provides that an application for sanction cannot be made later than 28 days after the order striking out the application. The second is to have the appeal reinstated under Rule 8(5) of the Tribunal Rules. The second relief from sanction can only be considered if the first relief from sanction is granted.[34]It is respectfully submitted that VP has not demonstrated that there are good grounds for this Tribunal to extend the period for making the application for reinstatement. Accordingly, the Tribunal ought not to relieve VP of the failure to comply with the time limit in Rule 8(6) of the Tribunal Rules.[35]In the event that the Tribunal is satisfied that it is appropriate to extend time for making the application, it is respectfully submitted that the appeal ought not to be reinstated. Statutory Provisions[36]The relevant statutory provisions are Rules 2, 7 and 8 of the Tribunal Rules. 37. Rule 2 of the Tribunal Rules provides:
“(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly. (2) Dealing with a case fairly and justly includes— (a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties; (b) avoiding unnecessary formality and seeking flexibility in the proceedings; (c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings; (d) using any special expertise of the Tribunal effectively; and (e) avoiding delay, so far as compatible with proper consideration of the issues. (3) The Tribunal must seek to give effect to the overriding objective when it— (a) exercises any power under these Rules; or (b) interprets any rule or practice direction. (4) Parties must— (a) help the Tribunal to further the overriding objective; and (b) co-operate with the Tribunal generally.” with cases fairly and justly. Rule 7 of the Tribunal Rules provides, inter alia: “(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. (2) If a party has failed to comply with a requirement in these Rules, a practice direction or a direction, the Tribunal may take such action as it considers just, which may include— (a) waiving the requirement; (b) requiring the failure to be remedied; (c) exercising its power under rule 8 (striking out a party's case); (d) restricting a party's participation in proceedings; or (e) exercising its power under paragraph (3)…” (a) waiving the requirement; (b) requiring the failure to be remedied; (c) exercising its power under rule 8 (striking out a party's case); Rule 8 of the Tribunal Rules provides, inter alia: “(1) The proceedings, or the appropriate part of them, will automatically be struck out if the appellant has failed to comply with a direction that stated that failure by a party to comply with the direction would lead to the striking out of the proceedings or that part of them. … (3) The Tribunal may strike out the whole or a part of the proceedings if— (a) the appellant has failed to comply with a direction which stated that failure by the appellant to comply with the direction could lead to the striking out of the proceedings or part of them;… … (5) If the proceedings, or part of them, have been struck out under paragraphs (1) or (3)(a), the appellant may apply for the proceedings, or part of them, to be reinstated. (6) An application under paragraph (5) must be made in writing and received by the Tribunal within 28 days after the date that the Tribunal sent notification of the striking out to the appellant...”

Approach Where Reinstatement Sought Out Of Time

[37]Where an application to reinstate an appeal is made under Rule 8(5) of the Tribunal Rules out with the statutory time limit for doing so, the Tribunal requires to consider whether to extend the statutory time limit before considering the underling application.[38]The requirement to approach the case in that manner was confirmed by the Upper Tribunal in The Commissioners for Her Majesty’s Revenue and Customs v BMW Shipping Agents Limited [2021] UKUT 91 (TCC) at [33] where it observed:
“In remaking the Decision, we will note as a starting point that the Company is seeking two separate, though obviously related, reliefs from sanctions. First it seeks relief from the sanction imposed by Rule 8(6) of the FTT Rules to the effect that no application for reinstatement can be made later than 28 days after the date the FTT sent notice that the appeal was struck out. That aspect of the request for relief from sanctions involved a request for an extension of the relevant time limit pursuant to Rule 5(3)(a) of the FTT Rules. The second relief from sanctions, which arises only if the extension of time is granted, is a request that the Company’s appeal, which was struck out for failure to comply with the “unless” direction of 27 October 2017 should be reinstated.”

Application For An Extension Of Time

[39]The Tribunal has the power to relieve a party of a failure to comply with a time limit contained in the Tribunal Rules. Whether or not to allow a party leave to appeal out of time is a discretionary decision.[40]The approach to be taken to applications for leave to appeal out of time was considered by the Upper Tribunal in the case of Data Select Limited v the Commissioners for Her Majesty’s Revenue and Customs [2012] STC 2195. The Upper Tribunal provided guidance as to the factors to be considered in such an application. It stated, at [34], that:
“Applications for extensions of time limits of various kinds are commonplace and the approach to be adopted is well established. As a general rule, when a court or tribunal is asked to extend a time limit, the court or tribunal asks itself the following questions: (1) what is the purpose of the time limit? (2) how long was the delay? (3) is there a good explanation for the delay? (4) what will be the consequences for the parties of an extension of time? and (5) what will be the consequences for the parties of a refusal to extend time? The court or tribunal then makes its decision in the light of the answers to those questions.”
[41]The position was considered further by the Upper Tribunal in the case of Martland v Revenue and Customs Commissioners [2018] UKUT 178: “[44] When the FTT is considering applications for permission to appeal out of time, therefore, it must be remembered that the starting point is that permission should not be granted unless the FTT is satisfied on balance that it should be. In considering that question, we consider the FTT can usefully follow the three-stage process set out in Denton :(1) Establish the length of the delay. If it was very short (which would, in the absence of unusual circumstances, equate to the breach being "neither serious nor significant"), then the FTT "is unlikely to need to spend much time on the second and third stages" - though this should not be taken to mean that applications can be granted for very short delays without even moving on to a consideration of those stages.(2) The reason (or reasons) why the default occurred should be established.(3) The FTT can then move onto its evaluation of "all the circumstances of the case". This will involve a balancing exercise which will essentially assess the merits of the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission. [45] That balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected. By approaching matters in this way, it can readily be seen that, to the extent they are relevant in the circumstances of the particular case, all the factors raised in Aberdeen and Data Select will be covered, without the need to refer back explicitly to those cases and attempt to structure the FTT's deliberations artificially by reference to those factors. The FTT's role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist. [46] In doing so, the FTT can have regard to any obvious strength or weakness of the appellant'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.” (1) Establish the length of the delay. If it was very short (which would, in the absence of unusual circumstances, equate to the breach being "neither serious nor significant"), then the FTT "is unlikely to need to spend much time on the second and third stages" - though this should not be taken to mean that applications can be granted for very short delays without even moving on to a consideration of those stages. (2) The reason (or reasons) why the default occurred should be established. (3) The FTT can then move onto its evaluation of "all the circumstances of the case". This will involve a balancing exercise which will essentially assess the merits of the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission.[42]Following Martland, the Tribunal should apply a three stage test looking first at the length of the delay, secondly at the reason for the default and finally considering the case in the round. In considering the case in the round, the Tribunal 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.[43]For completeness, in considering an application for leave to reinstate out of time, the Tribunal should not rely simply on assertions made by an appellant. In the case of Smith v Brough [2005] EWCA Civ 261, the Court of Appeal determined that it was for the appellant to prove any facts intended to be relied upon in support of an application for extension of time.[44]The deadline for making an application for reinstatement in this case was 12 February 2024 (28 days after the Strike Out Order). The application for reinstatement was received by the Tribunal on 28 March 2024. That is more than 6 weeks after the deadline had passed: over one and a half times the period which Parliament has provided for the making of the application. That cannot be described as a short or insignificant delay.[45]The application for reinstatement noted that it was late but did not give any real explanation of why that was the case. For example, the references to the conduct of VP’s previous solicitor contained in the application cannot be relevant to the question of why VP himself did not respond to the Tribunal, when his solicitor withdrew from acting.[46]The only statement that could touch upon the delay is the statement that VP is a vulnerable individual who is very unwell and partially blind. However, that explanation is so lacking in detail that it cannot be taken to explain his failure. Moreover, the Appellant forwarded the email from the Tribunal attaching the direction in question to RS on the day it was issued.[47]This must all be viewed against the conduct of the litigation by VP.[48]An investigation against tax fraud was issued in April 2014 covering a 20 year period. In July 2015, VP’s accountant prepared a disclosure report which was issued to HMRC and which detailed expenses. Income was assessed based on an analysis of VP’s bank statements. In 2017, an assessment was issued using these sources of information.[49]The appeal commenced in 2018. As a result of the coronavirus pandemic, there were understandable delays in progressing matters in the early part of 2020.[50]The Respondents advised the Tribunal in June 2020 that, subject to lodging additional documents, the Respondents were ready to proceed to a hearing. VP’s agent advised the Tribunal, in July 2020, that further investigations were required and that the case was not ready for a hearing. In response to VP’s email, the Tribunal determined that a case management hearing should be fixed so that appropriate directions could be made to move the proceedings towards a substantive hearing. A hearing was fixed for 12 October 2020.[51]In advance of that hearing, VP provided a letter from a doctor stating that he was one third of the way through a six month course of treatment. At the hearing on 12 October 2021 the appeal was sisted until 26 February 2021. This was not opposed by the Respondents.[52]Following expiry of the sist in 26 February 2021 there was a period of delay. This arose because:(i) lockdown provisions meant that hearings could not take place in person; and(ii) it was necessary to establish VP’s medical position. Ultimately a two day hearing was fixed for 01 and 02 December 2021.[53]On 3 September 2021, VP made an application to postpone the hearing on the basis that more time was required. That application was granted.[54]By order dated 23 November 2021, the appeal was sisted for a month to enable parties to reach agreement on directions. The order directed VP’s agents to contact the agents for the Respondent. The order recorded that it was highly unlikely that any further application for sist would be granted. The sist was however extended to 23 January 2022.[55]Thereafter, by order dated 24 June 2022, the parties were directed to provide specified information to the Tribunal by 18 July 2022. VP failed to respond prior to the deadline. The Tribunal issued an order dated 25 July 2022 providing that, unless VP responded to the previous order by 2 August 2022, a hearing would be fixed without further reference to him. Thereafter, a hearing was fixed for 17-21 April 2023.[56]In February 2023, VP sought the discharge of that hearing on the grounds that his medical condition meant that his solicitors had been unable to obtain instructions from him. They sought to adjourn the appeal for 4-6 months. Given the explanation provided by VP’s representatives, the Respondents did not oppose that application. The case was then sisted until 7 August 2023 to enable VP’s medical condition to be assessed.[57]In May 2023, the Respondents noticed a decision on the Scottish Courts website which showed that VP was progressing litigation in the Court of Session. The decision identified that the Appellant had participated in a four day proof before answer in May 2023. The same solicitors were instructed by VP in that action. VP was not only able to give instructions to them but had also appeared and given evidence. The Respondent raised this with VP’s solicitors and initially received no response.[58]In July 2023, the Appellant sought a further sist of his appeal The Respondent opposed that on the grounds that VP had been able to give instructions in the Court of Session action and that progress required to be made. A case management hearing was fixed before Judge Anne Scott for 21 September 2023.[59]At the case management hearing, senior counsel represented VP. It was no longer said that VP could not give instructions. Judge Anne Scott fixed a timetable to ensure progress would be made.[60]The Appellant failed to comply with the timetable. Thereafter, the agents for the Appellant withdrew from acting on 11 December 2023. VP’s application to reinstate his appeal suggests that the reason his solicitors took no steps to advance his case was that he did not put them in the funds necessary for them to do so.[61]It is of particular importance that litigation be conducted efficiently and at proportionate cost. It is also important that statutory time limits be respected. This case has now been ongoing for almost seven years with no real progress having been made. The Appellant has not made proper preparations to progress his appeal. He appears to be no further forward than when his appeal was first lodged. By his own admission his previous solicitors withdrew from acting because he did not provide them with the funds necessary to progress his case.[62]Moreover, the Respondents are concerned that VP has not been open and honest with the Respondents or the Tribunal in respect of his health in the past. His previous agents advised both the Respondents and the Tribunal that VP was not fit to give instructions or to attend at a tribunal hearing in April and May 2024. The Respondents took that explanation at face value and did not oppose an application to discharge the hearing. However, despite these representations, VP was in fact well enough to give instructions in another litigation. Significantly, VP has failed to explain why his application to reinstate the appeal was not made timeously. He clearly received it on the day that it was sent to him. In all of the circumstances, the interests of justice do not justify the granting of the extension sought.

Application For Reinstatement

[63]In the case of BPP Holdings v The Commissioners for Her Majesty’s Revenue and Customs [2017] UKSC 55 the Supreme Court considered the proper approach for Tribunals to take where there has been a breach of an order. The Supreme Court observed that the cases on time limits and sanctions under the English Court Rules did not apply directly to Tribunals but that the Tribunals would usually follow a similar approach. It also emphasised the important role that the Upper Tribunal has in determining the approach to the interpretation of the Tribunal Rules. It was observed that:
“[24]. In this case, when considering the proper approach to the making of a debarring order in the Ft-T, the Ft-T, and indeed the UT, the Court of Appeal, and counsel before us, concentrated on recent English cases... . These cases provide a salutary reminder as to the importance that is now attached in all courts and tribunals throughout the UK to observing rules in contentious proceedings generally, but they are directed to, and only strictly applicable to, the courts of England and Wales, save to the extent that the approach in those cases is adopted by the UT, or, even more, by the Court of Appeal when giving guidance to the Ft- T. [25]. Such guidance to tribunals on tax cases was given by Judge Sinfield in the UT in McCarthy & Stone. In para 43, after referring to differences and similarities between the CPR and the tribunal rules, in that case the Tribunals Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698), he accepted that "the CPR do not apply to tribunals" but added that he did not "accept that the UT should adopt a different, i.e. more relaxed, approach to compliance with rules, directions and orders than the courts that are subject to the CPR". The same view was expressed by Ryder LJ in paras 37 and 38 in the Court of Appeal in this case, including this: "I can detect no justification for a more relaxed approach to compliance with rules and directions in the tribunals", and added that "[i]t should not need to be said that a tribunal's orders, rules and practice directions are to be complied with in like manner to a court's." [26]. It is not for this Court to interfere with the guidance given by the UT and the Court of Appeal as to the proper approach to be adopted by the Ft-T in relation to the lifting or imposing of sanctions for failure to comply with time limits (save in the very unlikely event of such guidance being wrong in law)... The guidance given by Judge Sinfield in McCarthy & Stone was appropriate: as Mr Grodzinski QC, who appeared for BPP pointed out, it is "an important function" of the UT to develop guidance so as to achieve consistency in the Ft-T: see R (Jones) v First-tier Tribunal (Social Entitlement Chamber) [2013] 2 AC 48, para 41, per Lord Carnwath. And, by confirming that guidance in this case, the Senior President, with the support of Moore-Bick V-P and Richards LJ, has very substantially reinforced its authority. In a nutshell, the cases on time-limits and sanctions in the CPR do not apply directly, but the Tribunals should generally follow a similar approach.”
[64]It has been confirmed by the Upper Tribunal that the guidance in Martland applies to cases where the Tribunal is being asked to grant relief from sanctions (see BMW Shipping Agents Limited at [26]). Accordingly, the relevant test to be applied is the three stage test.[65]The relevant failure for these purposes is the failure by VP to advise the Tribunal of his intention to continue with his appeal following his agents’ withdrawal from acting. He ought to have done so on or before 8 January 2024.[66]However, he did not contact the Tribunal until 28 March 2024 which is over two and a half months after the date on which he was required to confirm his position. The only explanation given for this is his health for which the information provided is so lacking in detail that it does not enable the Tribunal to form a view on whether VP was, in fact, unable to respond timeously.[67]This is of particular concern where the Tribunal has been advised, on a previous occasion, that VP was unable to give instructions to solicitors when he was, in fact, instructing solicitors in a separate litigation.[68]The respondents say that VP has changed his position from his written statement to the evidence given at the tribunal and has contradicted his previous statements which related to the failure of his former solicitors MBS to communicate with him and has failed to prove that the ABC whom he also blamed were negligent.[69]HMRC say that VP did not want to continue with the costs of bringing his appeal and accordingly instructed his accountants, ABC, to seek to negotiate with HMRC. It was only when HMRC moved to recover the sums that were due that the applications were made.[70]VP was not willing to provide the payments required by MBS and their correspondence makes it clear that no work was undertaken, as a consequence, for any appeal. MBS stated that VP was not cooperating and had not provided the accounts which they consider to be a very important part of his defence.[71]Accordingly, HMRC say that the case was not being prepared because VP was not prepared to pay his solicitors and counsel to do so and that this was a conscious decision.[72]This being so, this was not a good reason for the appeal being made late.[73]Considering matters in the round, it is of particular importance that litigation be conducted efficiently and at proportionate cost. It is also important that statutory time limits be respected. This case has now been ongoing for seven years with no real progress having been made.[74]VP has not made proper preparations to progress his appeal. He appears to be no further forward than when his appeal was first lodged. By his own admission his previous solicitors withdrew from acting because he did not provide them with the funds necessary to progress his case. There is nothing in the appeal to suggest that his approach to the litigation would change.[75]Moreover, he has not been open and honest with the Respondents or the Tribunal in respect of his health in the past. Nor has he explained why he did not respond to the Unless Order issued to him directly by the Tribunal nor has he explained that he wishes to progress matters and how he would do so such as by funding his legal team and producing the required accounts.[76]HMRC say that these applications are another attempt to delay the enforcement action and that his case is weak and that his untruthfulness at the tribunal hearing makes this even weaker.[77]In all of the circumstances, the application to reinstate the appeal should be refused.

Appellant’s Submissions

[78]The first application is for relief from VP’s failure to make the application within the time limit of 28 days set out in rule 8(6) of the Rules.[79]The Strike Out Order was made on 15th January 2024. The present application was therefore required to be made by 12th February 2024. It was not made until 28th March 2024, and, therefore, a little more than six weeks late. The Respondents suggest that this cannot be described as a ‘short or insignificant delay’. Whether or not it can be so described, VP recognises that the application can be granted only if he proves the reason for the delay as sufficient to satisfy the Tribunal that the failure should be waived.[80]The reason for the failure was that VP says he could not find a solicitor to make the necessary appeal within the 28 day period but he did make attempts to do so and recalls, although not in detail, contacting the Law Society of Scotland to assist in this matter as had been suggested by his previous solicitors, MBS.

Application for appeal to be re-instated

[81]The reason the appeal was struck out was a failure to comply with the Unless[82]Strike-out is a draconian remedy and should be used only as a matter of last resort: HMRC v. BMW Shipping Agents Limited [2021] S.T.C. 1020, at [56 ] per the Upper Tribunal. In that passage, the Upper Tribunal emphasised:
‘Considerations of proportionality remain at the heart of the overriding objective set out in Rule 2 of FTT Rules.’
[83]None the less, VP recognises that in the context of this application too, the three-stage test of(i) identifying the seriousness of the failure,(ii) ascertaining why the failure occurred (including what facts VP has proved in that regard, and then(iii) evaluating all the circumstances of the case to determine whether the appeal should be reinstated, is the appropriate approach for the Tribunal to adopt.[84]VP’s previous solicitors withdrew from acting on 11th December 2023.[85]On 18th December 2023, VP was admitted to hospital. This was because of influenza A and pneumonia. He remained there for three days.[86]While VP was in hospital (of course unbeknown to the Respondents), by e-mail dated 19th December 2023, the Respondents requested a case management hearing to be held in advance of the due date for the Statement of Agreed Facts and Issues, which was 29th December 2023.[87]The purposes of the hearing would be to ascertain whether VP wished to continue with his appeal, whether he wished to instruct new agents, and whether a new date for the Statement of Agreed Facts and Issues should be fixed.[88]On 19 December 2023, the Tribunal issued the Unless Order requiring VP to state whether he intended to continue to proceed with his appeal, and, if he did so intend, to identify his agents, if any. It was sent to VP’s home address, provided to the Tribunal by the Respondents.[89]It is clear that, from 18th December 2023 onwards, the Respondents knew that VP was being represented by ABC Accountants, per Mr Singh, and that VP still contested various aspects of the assessments in dispute.[90]On 19th December 2023 (in which HMRC refer to an e-mail from ABC of the previous day referring to areas in dispute) and continuing through 8th February 2024, 21st February 2024, 8th March 2024, and 28th March 2024, this last being the date on which the present application was made. Thus, it is not a case where VP acted in a way to give the Respondents the impression that the matters were no longer in dispute.[91]Although the Respondents thus knew that matters remained in dispute, that VP was represented and that the representative was RS of ABC, the Tribunal was not advised of this.[92]The question is whether, in these circumstances, the appeal should be reinstated?[93]It is of course a serious matter to fail to comply with an Unless Order. In the present context, the particular importance is that(i) the Tribunal was left unaware that VP wished to continue the appeal, and of his representation, and(ii) the Respondents were left unaware that he wished to continue his appeal, albeit they knew that VP still wished to dispute certain aspects of the assessments.[94]VP instructed his accountants to negotiate with HMRC while he was trying to find a solicitor during the period when the appeal could be made within the 28 day period but it is not clear when the instruction was given to ABC to send their email of 28 March 2024 making the application. He did however make the application on 28 March 2024 making it clear he wished to appeal the assessment and find a solicitor.[95]The case is important for VP as it relates to an assessment of potentially over £1 million which is a significant amount of tax for an individual and during his accountants negotiations with HMRC it is clear that he continues to dispute the quantum of the assessments.[96]A reason for failure to comply was VP’s ill-health for at least some of the material time. VP was in hospital until 21 December 2023. He is not clear about what happened and in particular about how and when he instructed ABC to make the appeal.[97]The Appellant says that the merits of his case are “not hopeless” and one particular issue is whether the fact of VP’s bankruptcy in 2010 has a significant effect on the assessable period and the quantum assessed.[98]It is submitted that, in all the circumstances, this is a case where it is appropriate to grant relief from the strike out order. There will be considerable prejudice to VP if he cannot appeal against the assessments if reinstatement is not allowed notwithstanding the evidence of the witness in relation to dates and actions on those dates. It is accepted that the appeal has taken a long time to date, and that the tax at stake goes back to 2000-2001.[99]It is accepted that part of the reason for this has been delay caused by VP, albeit to an extent the reason has been his ill-health. None the less, in the context of the amount at stake, the Respondents’ knowledge that aspects of the assessments remained in dispute, and the Respondents’ knowledge that, at the time of the Unless Order, VP was represented by ABC, it is submitted that the Tribunal should allow re-instatement which would be a proportionate. TRIBUNAL ANALYSIS AND DECISION The Time limit Application

TRIBUNAL ANALYSIS AND DECISION

[100]We have takenthe starting point as set out in of Martland at [29]:
“...the presumption should be that the statutory time limit applies unless an applicant can satisfy the FTT that permission for a late appeal should be granted, but there is no requirement that the circumstances must be exceptional before the FTT can grant such permission.” and then carried out the three stages:1) Establish the length of the delay.;(2) Consider the reason (or reasons) why the default occurred, and (3) evaluate "all the circumstances of the case" which involves a balancing exercise which will essentially 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.”

Length of the delay

[101]We find that the delay in making an appeal of 46 days in relation to an appeal period of 28 days is not “very short” and is long enough to be considered serious and requiring time to be spent addressing the second and third stages of the Martland test.

The reason (or reasons) why the default occurred

[102]VP provided contradictory evidence for the reasons for the delay; initially stating that this was caused by his relying on his accountants who failed to understand the importance and effects of not complying with the 28 day limit and stating he was not aware of the Unless Order and its significance. His evidence before the tribunal, however, was that the reason for the delay was caused by his difficulty in finding a solicitor to represent him and that he was aware of the Strike Out Order, and the Unless Order, and their significance.[103]We did not find any evidence to support the first reason and his revised reason was not convincing as not only was a solicitor not required to make an appeal within 28 days, and could have been done by VP himself, but that in the event his accountant made the appeal on 28 March 2024 and so could have done at any time after both VP and RS received the Strike Out Order on 15 January 2024 and discussed it on 24 January 2024.[104]We were fully cognisant of VP’s health issues but on the evidence before us it was, as suggested by HMRC, sufficiently clear up that VP was well enough to discuss the Strike Out Order on 24 January 2024 and give instructions in relation to other matters, such as his accountant negotiating with HMRC on his behalf, so that it was not credible that he could not have been able to decide whether or not to make an appeal, regardless of whether or not, within the 28 day period, he would have been capable of giving evidence had he been required to do so[105]Counsel for the Appellant stated that HMRC were aware that the VP disputed certain aspects of the assessment and this was clear from the evidence. This did not, however, mean that VP wish to continue his appeal and we were persuaded by HMRC’s submission that VP did wish to continue the negotiating aspect of the assessment and hoped to do so “to bring matters to a conclusion” which would avoid him having to pay, up-front, substantial legal costs.[106]The evidence leads us to the conclusion that VP made a conscious decision not to lodge an appeal within the 28 day period in the hope of there being no requirement for an appeal and having to pay the legal costs of preparing for it until HMRC took steps to recover the amount of the assessment.[107]VP did take steps to find a lawyer and says he contacted the Law Society of Scotland and made enquiries with at least one other firm of solicitors but they were unable to assist and did latterly engage Nisbets Solicitors. He could not, however, recall when he instructed his accountant, RS, to lodge an appeal and could not remember definitively when he contacted the other firms of solicitors to act for him.[108]There was no evidence that RS had made a mistake by failing to make a late appeal and no evidence was provided by RS or ABC on this point.[109]The terms of the Strike Out Order were quite clear as was the appeal period of 28 days. Although MBS, VP’s former solicitors, were no longer acting on his behalf at the issuance of the Unless Order and the Strike Out Order, he was professionally represented by an accountant, RS of ABC.[110]Fundamentally, there is no evidence before us which provides a good reason or reasons for the delay in filing the appeal within the 28 day period.[111]Accordingly, we are unable to find that the reasons put forward for the delay were good reasons.

Evaluation of "all the circumstances of the case"

[112]In balancing the merits of the reasons given for the delay and the prejudice which would be caused to both parties by granting or refusing permission, we find that the reasons for the delay have very little, if any, merit but accept that the prejudice to the Appellants is significant given the amount involved.[113]We also must consider the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected to bring finality as set out in Martland.[114]As referred to in Smith v Brough, we need to take account of the public interest in the finality of litigation and the interests of the Respondents in addition to those of the Appellant. Compliance with time limits is expected and the Appellant has provided no good reason or reasons why he did not comply.[115]VP did not require the services of a lawyer to make an appeal within the 28 day period when he had both received the Unless Order of 19 December 2023 and the Strike Out Order of 15 January 2024. He was professionally represented by his accountant, RS, and discussed the Strike Out Order with him. Nevertheless, no action was taken to make an appeal until 28 March 2024 which was 46 days late.[116]Whereas there is prejudice to the Appellant in that he will not be able to challenge the assessment, the Respondents’ submissions on the strength or weakness of VP’s case was that VP’s case was weakened as he had contradicted his written evidence and cited the instance when VP stated he was unable to attend the matter before the tribunal hearing but was conducting litigation in the Court of Session. Counsel for the Appellant thought VP’s case was “not hopeless” and that the quantum of the assessment may be greatly affected by his bankruptcy in 2010.[117]Taking these submissions into account, to the extent we are required to, and weighing them in the balance, we do not consider that VP has a strong case.[118]We have taken into account the medical reports that were submitted as referred to in the chronology of this case which we were provided with and more recently but in relation to the issue of the appeal being late we are not, however, persuaded that VP’s medical condition would have prevented an appeal being lodged in time. Although it might have prevented him giving evidence, that task would be some time off after intimating an in-time appeal.[119]We have also taken into account that previously VP had engaged in a Court of Session action when stating that he could not issue instructions in relation to a matter before the Tribunal and that he was subject to an Unless Order in 2022 and so had previous experience of such an order.[120]There was no evidence provided by VP to substantiate his written statement that his accountants were at fault and responsible for the failure to appeal in time. In any event, his accountants, as professional advisers, had received the Strike Out Order and should have been aware of the consequences of not making an in-time appeal.[121]We do not find it convincing that VP could not recall when he had instructed RS to make the appeal which was initially confirmed by email on 28 March 2024 nor the specific reasons for doing so when he previously did not do so following his receipt of, and discussion with RS about, the Strike Out Order.[122]The investigation against tax fraud, which started this process was issued in April 2014 which is over 9 years ago. Almost 8 years ago his accountant prepared a Disclosure Report and in 2017 an assessment was issued and an appeal commenced in 2018, almost seven years ago[123]The emails to VP from MBS indicate that the preparation for an appeal against the assessment was far from being ready in December 2023, including the fact that there are no accounts with which to dispute the Disclosure Report and the information HMRC have taken from VP’s bank statements, and no proposals were put to us that, since that date, there has been any change in that position.[124]Permission for a late appeal should not, in terms of Martland, be granted unless we are satisfied on balance that it should be. We are required to take into account the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders.[125]We have found that there is no good reason or reasons for the delay and that the length of delay is serious.[126]As regards all the other circumstances, we find that they are not such as to persuade us to grant permission, once we take into account the particular importance of the need for statutory time limits to be respected in the context of a case which we do not consider is strong, and even since June 2020 is nearly 5 years in length with no case preparation having been completed or progressed and given the absence of any good reasons for delay in making an in-time appeal.[127]Accordingly, for the reasons stated the Time Limit application is refused[128]As we have refused the Time Limit application we are not required to consider the Reinstatement application but consider it appropriate to do so.[129]We refuse the Reinstatement application, substantially, for the reasons set out in relation to the Time Limit application.[130]We consider that the prejudice to the Appellant is outweighed by the prejudice to the Respondents and to the public interest.[131]We do not believe, to the extent that we are required to do so, that, when placed on the scales, that VP has a strong case particularly in view of the concerns raised by MBS who were attempting to act on his behalf and who considered that VP had ‘shown a complete reluctance to provide any co-operation’, the absence of accounts which were considered important for the appeal and the lack of veracity of VP’s evidence.[132]The correspondence from MBS also shows that despite the appeal being originally scheduled for a hearing in December 2021, VP’s case was far from being in a state to progress to such a hearing three years later.[133]Taking all these factors together in light of the Tribunal’s overriding objective, we consider that there was a serious failure in not appealing the “draconian remedy” of the strike out, clearly explained in terms of the Strike Out Order which was sent to both VP and his professional adviser and that there are no good reasons why the failure to appeal on time occurred. As set out above, having evaluated all the circumstances of the case we find that the appeal should not be reinstated.

Disposal

[134]The Applications being the Time Limit application and the Reinstatement application are refused.

Right to apply for permission to appeal

[135]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. WILLIAM RUTHVEN GEMMELL TRIBUNAL JUDGE Release date: 16th May 2025 APPENDICIES Appendix A Legislation – Tribunal Rules Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009/273, Rule 2. Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009/273, Rule 7. Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009/273, Rule 8. Appendix B Authorities Referred To Smith v Brough [2005] EWCA Civ 261. Data Select Limited v the Commissioners for Her Majesty’s Revenue and Customs [2012] STC 2195. Revenue and Customs Commissioners v McCarthy and Stone (Developments) Ltd [2014] UKUT 196 (TCC). Romasave (Property Services) Ltd v Revenue and Customs Commissioners [2015] UKUT 254 (TCC). BPP Holdings Ltd v Revenue and Customs Commissioners [2017] UKSC 55. Martland v Revenue and Customs Commissioners [2018] UKUT 178 (TCC). Revenue and Customs Commissioners v BMW Shipping Agents Limited [2021] UKUT 91 (TCC).

Order

specifically, the failure to comply with the requirements in that order that, by noon on 8th January 2024, VP should send to the Tribunal and to the Office of the Advocate General confirmation of whether he intended to proceed with the appeal, and, if he did so intend, whether he was represented and, if he was represented, by whom.