Per Wimmer & Anor v The Commissioners for HMRC [2025] UKFTT 853 (TC)

[2025] UKFTT 00853 (TC)Case No TC09575
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 1 April 2025Date Judgment date: 10 July 2025
[By remote video hearing]
Appeal reference: TC/2024/02224
TC/2024/02238
PROCEDURE – Application to make a late appeal – Martland applied - length of delay between 96 days and 292 days – serious and significant – payment plan suggested and bankruptcy proceedings being dealt with by Appellants as a priority – discovery assessments, closure notices and penalty subsequently not appealed in time despite numerous exchanges of correspondence between the Appellants and HMRC – ‘protective steps’ wrongly considered to have been taken by Appellants – no good reason - balance of prejudice to the parties – applications refused
Before
JUDGE NATSAI MANYARARA
Between
PER WIMMERAppellantWIMMER FINANCIAL LLPAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Phillipe Freund of Counsel for AppellantMr Alex Barrett, Litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]This decision concerns applications, under s 49(2) of the Taxes Management Act 1970 (“TMA”), for permission to make late appeals. The First Appellant[2]The First Appellant (Mr Per Wimmer) seeks to permission to make a late appeal against the following decisions: Tax Year Description Amount 2007-08 Discovery Assessment £43,070.00 2008-09 Discovery Assessment £56,171.38 2009-10 Discovery Assessment £43,809.04 2010-11 Discovery Assessment £70,907.53 2011-12 Discovery Assessment £42,832.05 2012-13 Discovery Assessment £17,792.92 2013-14 Discovery Assessment £18,314.24 2014-15 Discovery Assessment £2,754.96 2016-17 Closure Notice £29,116.61 2017-18 Closure Notice £22,278.79 2018-19 Closure Notice £2,400.00 2019-20 Closure Notice £2,700.00 2020-21 Closure Notice £46,528.33[3]The discovery assessments for the 2012-13, 2013-14 and 2015-16 tax years were issued on 13 March 2019, 10 February 2020 and 2 March 2022 (respectively). The closure notices for the 2017-18 to 2020-21 tax years, and the discovery assessments for the 2007-08 to 2014-15 tax years, were issued on 31 May 2023.[4]The amendments in the closure notices and discovery assessments to tax were made on the following basis:(1) For 2007-08, UK income and gains were assessed, but only foreign income and gains that had been remitted; and(2) For 2008-09 onwards, worldwide income and gains were assessed on the arising basis.[5]Through an analysis of bank statement, it was discovered that a number of sources had not been declared. These included a variety of UK self-employment, dividends, foreign income, rents and capital gains. The countries to which the foreign amounts originated included Denmark, America and Australia.[6]The First Appellant further seeks permission to make a late appeal against a notice of penalty assessment, dated 5 October 2023 and in the sum of £866,106.25, in respect of inaccuracies in his self-assessment tax returns.

The Second Appellant

[7]The Second Appellant (Wimmer Financial LLP) seeks permission to make a late appeal against the following decisions: Tax Year Description Profits added 2017-18 Closure Notice £6,890 – share of profits reallocated 100% to the First Appellant 2018-19 Closure Notice £20,757 – share of profits reallocated 100% to the First Appellant 2019-20 Closure Notice £80,312 – share of profits reallocated 100% to the First Appellant 2020-21 Closure Notice £146,262 – share of profits 100% to

The First Appellant

[8]The amendments in the closure notices and discovery assessments were made on the following basis:(1) Travel and subsistence and legal and professional fees were excessive; and(2) The profit share for each year was allocated as a 50:50 split between the First Appellant and Wimmer Services Limited (“WSL”). This split was reallocated 100% to the First Appellant due to excess profit allocation rules.[9]The closure notices were issued on 31 May 2023.[10]All of the notices were served on the First Appellant in his capacity as an individual taxpayer and/or nominated partner for the Second Appellant. In addition, the notices were served to the acting agent at the time. All of the notices made clear that an appeal should be made within 30 days of the date of the letter. In addition, penalty explanation letters were sent for onshore and offshore inaccuracies.

Background facts

[11]On 3 January 2019, HMRC commenced a Code of Practice 8 (“COP8”) investigation into the First Appellant. This was issued together with an opening letter in relation to an enquiry into the First Appellant’s 2016-17 tax return.[12]On 13 March 2019, HMRC raised discovery assessments for the 2012-13 and 2014-15 tax years. The assessments brought into charge foreign income and remittance basis charges.[13]On 29 May 2019, HMRC opened an enquiry into the partnership tax return for the Second Appellant, for the accounting period ended (“APE”) 31 December 2017.[14]On 16 January 2020, HMRC opened an enquiry into the First Appellant’s tax return for the 2017-18 tax year.[15]On 10 February 2020, HMRC raised discovery assessments for the 2013-14 and 2015-16 tax years, in respect of the First Appellant. The assessments brought into charge remittance basis charges, foreign income, foreign rental income and LLP profits.[16]On 21 February 2020, the First Appellant’s agent appealed (to HMRC) against the discovery assessments.[17]On 9 July 2020, HMRC notified the First Appellant that they were opening a COP9 investigation into him.[18]On 16 September 2020, HMRC opened an enquiry into the Second Appellant’s partnership tax return, for the APE 31 December 2018.[19]On 16 November 2020, HMRC opened an enquiry into the First Appellant’s tax return for 2018-19.[20]On 9 September 2021, HMRC opened an enquiry into the First Appellant’s tax return for 2019-20. On the same date, HMRC opened an enquiry into the Second Appellant’s partnership tax return for the APE 31 December 2019.[21]On 2 March 2022, HMRC raised a further discovery assessment for the 2015-16 tax year, in the sum of £92,193.85 (in respect of the First Appellant) bringing into charge UK self- employment income, foreign self-employment and employment income, rental income, investment income and capital gains.[22]On 30 September 2022, the First Appellant appealed against the 2015-16 discovery assessment.[23]On 16 November 2022, HMRC opened an enquiry into the Second Appellant’s partnership tax return for the APE 31 December 2020.[24]On 23 March 2023, HMRC issued a discovery assessment to the Second Appellant, for the 2016-17 tax year, which reallocated the profits of the partnership. The share was previously split 50:50 between the First Appellant and WSL. For the relevant tax year, the profits were £98,600, split £49,300 per partner. The amendment reduced WSL’s share to nil and attributed 100% of the profits to the First Appellant. The letter outlined that an appeal should be made within 30 days from the date of the letter. Copies of the notice were sent to the First Appellant as the nominated partner of the Second Appellant, and his agent at the time. On the same date, a consequential amendment was issued to the First Appellant.[25]On 31 May 2023, HMRC issued the discovery assessments and the closure notices to the First Appellant.[26]On 30 June 2023, the First Appellant’s agent, GSC Solicitors LLP (“GSC”), sent in a letter to HMRC, which made some comments on the calculations (in relation to the 2009-10 and 2010-11 tax years). A review was carried out on these years and agreement was requested for the figures. An appeal was made against an offshore, penalty but the onshore penalty was agreed.[27]On 7 July 2023, HMRC clarified the figures and stated that the penalty assessments had not yet been issued. No response was received to this email.[28]On 15 September 2023, HMRC issued two letters to the First Appellant. The first letter set out all of the items where an appeal to HMRC had not been received. The letter stated that these matters were considered ‘settled’. The second letter was a “View of the Matter”, giving the First Appellant the opportunity to either request a review, or appeal to the Tribunal within 30 days of the date of the letter. In addition, there was a change to the calculation for the 2015-16 discovery assessment issued on 10 February 2020, removing the partnership income incorrectly assessed on the First Appellant, personally. The letters were copied to the agent at the time.[29]On 22 September 2023, HMRC issued consequential amendments to the First Appellant for the 2017-18 to 2020-21 tax years, in respect of the amendments made to the Second Appellant’s partnership return.[30]On 5 October 2023, HMRC issued a notice of penalty assessment to the First Appellant, in respect of inaccuracies in his tax returns and a failure to correct the returns. This totalled £866,106.25. A copy of this notice was served to the agent at the time. The document explained that the First Appellant had 30 days from the date of the letter to appeal the penalty.[31]On 8 November 2023, a call was held between HMRC and the First Appellant’s agent. During the call, the agent stated that it didn’t seem that there were grounds for a late appeal. The agent discussed how best to pay the outstanding debt.[32]On 9 November 2023, HMRC wrote to the First Appellant again, stating that they now considered all of the matters set out in the “View of the Matter” settled as no response had been forthcoming.[33]On 24 November 2023, the First Appellant’s new agent, Trident Tax (“Trident”), sent a payment proposal to HMRC.[34]On 8 February 2024, the First Appellant appointed a new agent, CTM Tax Litigation(“CTM”), who made a late appeal against “all assessments and penalties”.[35]On 29 February 2024, HMRC replied setting out their view that the late appeal was not accepted.[36]On 26 March 2024, the Appellants appealed to the First-tier Tribunal (“FtT”), out of time.

Evidence and submissions

[37]Whilst the First Appellant was in attendance at the hearing, he was not called to give evidence. Mr Freund’s submissions can be summarised as follows:(1) It has taken HMRC up to 15 years to issue assessments and the First Appellant was in practice and unrepresented during that time.(2) The Appellants’ failure to lodge in time appeals all occurred between 30 June 2023 and 4November 2023. During that time, the Appellants were represented by GSC. GSC wrote to HMRC on 30 June 2023, in response to HMRC’s “Settlement Explanation Letter” dated 31 May 2023. In their letter, GSC informed HMRC that they disagreed with the conclusions reached in the letter in respect of, amongst other things, the tax and penalty treatment of the First and Second Appellants. At para. 4.2 of the letter, GSC specifically informed HMRC that the Appellants wished to appeal against the offshore penalties. Whilst the letter does not specifically appeal the closure notices and discovery assessments, it is, nevertheless, clear that the Appellants did not accept them. The Appellants understood that the steps taken in the letter of 30 June 2023 were being taken to protect their position.(3) The Appellants’ business, which is largely in the Real Estate Development area, suffered substantially as a result of the COVID pandemic. As a result of real estate projects no longer being viable, the Appellants had to repay significant amounts of money to various entities. Combined with rising interest rates, the Appellants found themselves in a situation where they could no longer settle GSC’s outstanding fees. As a result, GSC notified the First Appellant that until their fees had been paid, they would be unable to carry out any further work for him.(4) On 5 October 2023, HMRC issued the First Appellant with a notice of penalty assessment in relation to the penalty GSC had appealed in their letter of 30 June 2023. There had been no correspondence from HMRC rejecting the appeal, nor reaching a new decision. Upon receipt of the penalty notice, the First Appellant contacted GSC for advice on how to respond. GSC responded on 16 October 2023 stating that they were unable to assist him until all of their fees had been brought up to date. As a result, the First Appellant contacted Trident Tax (“Trident”), whom he instructed on 26 October 2023. Alan Kennedy of Trident contacted HMRC the following day to start getting the necessary authorities in place. In this process, he was informed that HMRC were taking steps to bankrupt the First Appellant. Trying to avoid this outcome by trying to reach agreement on a payment plan became the sole focus of Trident’s work. As a result of this, the Appellants contacted CTM on 12 January 2024. This led to the appeals being notified to HMRC by a letter dated 8 February 2024. By a letter dated 29 February 2024, HMRC indicated that they were not minded to accept the Appellants’ late appeals, and that the Appellants would need to request permission from the Tribunal instead. As a result, CTM filed two notices of appeal for the Appellants on 26 March 2024.(5) The above illustrates that the delay was due to: (i) a combination of extreme financial circumstances leading to a breakdown in communications with the First Appellant’s original agents; (ii) the fact that the First Appellant understood that the letter dated 30 June 2023 would protect the Appellants’ position; and (iii) the urgency of having to deal with bankruptcy proceedings threatened by HMRC as a priority.(6) Whilst it is acknowledged that in relation to the assessments and closure notices only, GSC failed to submit formal appeals in time, HMRC v Katib [2019] UKUT 189 (TCC)is not authority for the proposition that if advisers fail to submit an appeal in time, the taxpayers have no good reason for a late appeal.(7) Taking all the other factors into account, in particular the fact that HMRC were put on notice that the Appellants disagreed with their approach, there is a good reason for the Appellants missing the appeal deadline.[38]Mr Barrett’s submissions can be summarised as follows:(1) The late appeals are a mixture of late appeals to HMRC and the Tribunal. The earliest appeal is three months and four days (96 days) late and the latest the appeal is nine months and 17 days (292 days) late. In the context of an appeal right which must be exercised within 30 days, the delay in this case is serious and significant.(2) The penalty notice, together with several other letters, clearly outline the appeal rights of the Appellants. It is evidently clear, within those letters, that the matters should be appealed within 30 days. Therefore, HMRC do not consider that the Appellants would not have been aware of such rights. The Appellants simply allowed matters to drift by.(3) The Appellants had access to advice throughout the enquiries/compliance investigations. The Appellants first appointed non-domicile tax specialists, Mark Davies & Associates, from July 2013; then a non- domicile law firm, GSC, from June 2021 and, lastly, a COP9 dispute resolution specialist, Trident, from October 2023. HMRC’s view is that all were qualified to give advice.(4) The First Appellant has not suggested that he was misadvised in anyway, but it would appear that he was not attempting to appeal but attempting to work towards settlement and payment. During mid to late 2023, HMRC and the First Appellant were engaged in discussions where agreements on the figures were reached, and time to pay was being sought by the Appellants. At no point after the notices were issued did the Appellants state an intention to appeal. The Appellants were attempting to settle the outstanding amounts. The Appellants have shown a blatant disregard for the time limits.(5) Having insufficient funds to seek alternative advice is not a good reason for appealing late. Making an appeal is a simple process which does not require expert knowledge. The Appellants could have made an appeal first, then sought advice. It is unreasonable that the Appellants would simply not take any action until they appointed new representatives. HMRC notices clearly signposted the need to appeal and it was made clear that no appeal had been made. A rudimentary search online would have shown the First Appellant that he could challenge the penalty. The First Appellant cannot shift the blame onto his representatives. The onus is squarely on him to ensure that the appeals are properly made.(6) The First Appellant now contends that the letter of 30 June 2023 from his then representative, GSC, was an appeal letter. At no time until the witness statement was submitted on 23 December 2024 has the First Appellant, or his representatives, made clear that the 30 June 2023 letter was intended as a letter that would dispute the assessments/amendments and closure notices in full. It seems unreasonable that 18 months after the decisions were issued, the First Appellant now believes that the letter is an appeal. Such an argument could have been made earlier but it was never put to HMRC when the late appeals were rejected in February 2024, or when the First Appellant was notified that there had been no appeals in September 2023. HMRC clarified figures on 7 July 2023 but no further response was forthcoming.(7) HMRC outlined in their letter dated 15 September 2023 that no appeals had been made. The position was clear yet there was no mention that the First Appellant believed that there had been an appeal.[39]At the conclusion of the hearing, I reserved my decision, which I now with reasons.

Discussion

[40]The Appellants seek permission to make late appeals against discovery assessments, closure notices and a penalty assessment. The application for permission to make a late appeal is governed by s 31A TMA. This permits taxpayers to appeal, but the appeal must be made within 30 days after the date the notice is given to the taxpayer. Section 49 TMA permits, in one of two situations, a taxpayer to lodge a late appeal. The first circumstance in which a taxpayer is permitted to lodge an appeal late is where HMRC are satisfied that there is a ‘reasonable excuse’ for not giving the notice in time, and that the appeal was lodged without unreasonable delay after the excuse ceased (ss 49(5) and (6) TMA). The second circumstance in which an appellant can lodge an appeal late is where this Tribunal ‘gives permission’ (s 49(2) TMA).[41]The Appellants should have taken two distinct steps in order to get the appeal before the Tribunal:(1) Firstly, they should have appealed to HMRC under s 31A TMA. There is a deadline in s 31A (30 days after the notice was issued) for the appeal to be made to HMRC and both HMRC and the FtT have power under s 49(2) TMA to extend that deadline.(2) Secondly, after appealing to HMRC, the Appellants need to notify the appeal to the FtT. If the Appellants have either offered, or requested, an HMRC review, there is a deadline for doing so. However, if no review has been offered or requested, there is no deadline. The relevant deadlines (applicable to situations where reviews have been offered or requested) are set out in s 49G and s 49H TMA.[42]It is well established that the Tribunal must take all relevant matters into account when exercising its discretion to admit a late appeal: Data Select Ltd v R & C Comrs [2012] STC 2195 (‘Data Select’). While this means that the Tribunal might, in appropriate circumstances, grant leave to appeal out of time to a taxpayer without a reasonable excuse, it also means that the Tribunal will take all matters into account and so a taxpayer with a reasonable excuse will not necessarily be granted permission to appeal out of time. There are no fetters given in the legislation on the exercise of discretion by the Tribunal.

Martland and the three-stage approach

[43]The principles applicable to determining the issue of delay have been the subject of much adjudication and consideration. In BPP Holdings v R & C Comrs[2017] SC 55 (‘BPP Holdings’), a direction had been made by the FtT indicating that HMRC would be barred from participating in proceedings if the direction was not adhered to. This was the relevance of the strict approach in adhering to time limits. The differences in fact in BPP Holdings and in the application before me do not, however, negate the principle established in relation to the need for statutory time limits to be adhered to.[44]In BPP Holdings, the court endorsed the approach described by Morgan J in Data Select. Morgan J described the approach in the following way:
“[34] … 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 relevant time limit, the court or tribunal asks itself the following questions: (1) what is the purpose of the time limit? (2) how long was the delay? (3) is there a good explanation for the delay? (4) what will be the consequences for the parties of an extension of time? and (5) what will be the consequences for the parties of a refusal to extend time? The court or tribunal then makes its decision in the light of the answers to those questions. … [37] ... The general comments in the above cases will also be found helpful in many other cases. Some of the above cases stress the importance of finality in litigation. Those remarks are of particular relevance where the application concerns an intended appeal against a judicial decision. The particular comments about finality in litigation are not directly applicable where the application concerns an intended appeal against a determination by HMRC, where there has been no judicial decision as to the position. None the less, those comments stress the desirability of not re-opening matters after a lengthy interval where one or both parties were entitled to assume that matters had been finally fixed and settled and that point applies to an appeal against a determination by HMRC as it does to appeal against a judicial decision.”
[45]In the context of an application to make a late appeal, the obligation is simply to take into account of all of the relevant circumstances and to disregard factors that are irrelevant.[46]Helpful guidance can also be derived from the three-stage process set out by the Court of Appeal in Denton & Ors v T H White Ltd & Ors[2014] EWCA Civ 906 (‘Denton’). The seriousness and significance of the relevant failure has always been one of the factors relevant to the Tribunal’s determination. That is encompassed in the reference in Data Select, at [34], to the purpose of the time-limit and the length of the delay. The reason for the delay is a common factor in Denton and Data Select, as is the need to evaluate the circumstances of the case so as to enable the Tribunal to deal with the matter justly.[47]The approach to the consideration of an application to extend time should now follow that set out by the Upper Tribunal (‘UT’) in Martland v R & C Comrs[2018] UKUT 178 (TCC) (‘Martland’). That case itself concerned a late appeal to the FtT. The approach adopted followed from a consideration of authorities, including BPP Holdings. Martland held that the principle of fairness and justice is applicable, as a general matter, to any exercise of a judicial discretion.[48]Applying the three-stage approach adopted in Denton, the UT in Martland set out the following staged approach, at [44]:
“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 tribunal is unlikely to need to spend much time on the second and third stages – though this cannot be taken to mean that applications can be granted for very short delays without moving on to a consideration of those stages. (2) The reason (or reasons) why the default occurred should be established. (3) The tribunal 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 reasons given for the delay and the prejudice.” (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 tribunal is unlikely to need to spend much time on the second and third stages – though this cannot be taken to mean that applications can be granted for very short delays without moving on to a consideration of those stages. (2) The reason (or reasons) why the default occurred should be established. (3) The tribunal 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 reasons given for the delay and the prejudice.”
[49]This approach was confirmed by the UT in Websons (8) Limited v HMRC [2020] UKUT 0154 (TCC).[50]The Appellants’ appeals to HMRC and to the Tribunal were made outside of the statutory deadline for appealing. HMRC have refused consent under s 49(2)(a) TMA. For the following reasons, Ihave decided not togive permission for the appeals to be notified late:

Stage 1: The length of the delay

[51]The length of the delay is to be considered by reference to the time-limit for submitting an appeal. This was confirmed in Romasave (Property Services) Ltd v R & C Comrs [2015] UKUT 254 (TCC) (‘Romasave’), at [96]. There, the UT held that:
“In the context of an appeal right which must be exercised within 30 days from the date of the document notifying the decision, a delay of more than three months cannot be described as anything but serious and significant.”
[52]In respect of the first stage, there can, in my view, be no argument but that the delay in making an application to appeal was serious and significant. The appeal is between 96 days and 292 days late. In Secretary of State for the Home Department v SS (Congo) & Ors [2015] EWCA Civ 387 (‘SS (Congo)’), at [105], the Court of Appeal has similarly described exceeding a time-limit of 28 days for applying to that court for permission to appeal by 24 days as significant and a delay of more than three months as serious.

Stage 2: The reasons why the default occurred

[53]In relation to the second stage, and the reasons why the default occurred, it is submitted on behalf of the Appellants that:(1) the Appellants understood that the letter dated 30 June 2023 (from GSC) would effectively ‘protect’ their position;(2) the effects of the COVID pandemic meant that the Appellants’ business was affected and they could not pay their agent’s fees; and(3) the urgency of having to deal with bankruptcy proceedings threatened by HMRC was treated as a priority.[54]I will take these submissions in turn.[55]In respect of the first of the Appellants’ submissions, I find that Mr Freund’s assertion that the letter dated 30 June 2023 from GSC (“the June letter”) was intended to protect the Appellants’ position is highly misconceived. This is because an appeal can only be made against an appealable ‘decision’ and there is no concept of a ‘protected appeal’ before a decision is made. It appears to be the case that the Mr Freund is attempting to draw parallels with the concept of a ‘protected’ assessment being raised by HMRC.[56]I find that the June letter does not, in any event, support Mr Freund’s submission that the First Appellant believed that a protected appeal had been made. The June letter was set out in the following terms:
“PTW and Wimmer Financial LLP We are now writing in response to your settlement explanation letter dated 31 May 2023. … 4. Penalties 4.1. PTW accepts the penalties in respect of the domestic position. … 4.3. Given the above we would appreciate a reduction in the penalties particular [sic] relating to the offshore element… Subject to the above PTW is in a position to agree a final settlement figure and work with HMRC to put together a suitable payment plan.”

[Emphasis added]

[57]Nowhere in this letter is a protected appeal referred to. On the contrary, the June letter supports Mr Barrett’s submission that the Appellants were proposing a settlement plan, and not contemplating an appeal. Even if the concept of a protected appeal were possible, the June letter did not refer to the discovery assessments and the closure notices; which were not appealed until 8 February 2024 despite being issued on 13 March 2019, 10 February 2020 and 31 May 2023. The penalty notice was only issued on 5 October 2023.[58]The Settlement Explanation Letter (dated 31 May 2023) from HMRC to the Appellants (which the June letter was responding to) is set out in the following terms:
“Settlement Explanation I am writing to let you know that I am bringing my investigation to a close. … If you do not give me any other information within 30 days, or if you give me information that does not change my view, I will charge you penalties shown in the schedules. I will send you a Notice of Penalty Assessment for each penalty. … What to do if you do not agree If you do not agree, you need to send us more information to explain why. You cannot appeal or ask for a review yet. You’ll be able to appeal or ask for a review if we send you a notice of penalty assessment. We’ll tell you more about this in the notice.”

What to do if you do not agree

[59]It is clear from its wording that HMRC’s letter of 31 May 2023 was not an appealable decision. Indeed, the letter clearly states that if no further information was received from the Appellants, penalties would be charged. The letter further clearly states that an appeal could not be lodged yet.[60]The penalty notice subsequently issued in October 2023 included the following instruction:
“What to do if you disagree If you disagree with our decision, you can appeal by writing to us. You need to do this within 30 days of the date of this letter telling us why you think our decision is wrong.”
[61]Once again, no appeal was made against the penalty until 8 February 2024.[62]Contrary to Mr Freund’s submission that HMRC did not respond to the June letter, there was, in fact, a response to the June letter by HMRC. The response is dated 7 July 2023 and came from the Fraud Investigation Service (“FIS”) Offshore, Corporate and Wealthy Team. The response is set out in the following terms:
“Perhaps it would be worth setting up a Teams call to talk through any further queries and/or clarifications. Just let me know if you think that would be worthwhile.”
[63]No response was, however, received to this email by HMRC.[64]Whilst the First Appellant refers to relying on his agents, it is clear that by an email dated 8 September 2023 (from his agents, GSC, to the First Appellant), the First Appellant was advised of the following:
“Please note that I am being chased by HMRC to have a meeting…and agree the final sum to settle the tax investigation. I am also not able to do this until all our fees are paid in full and receive funds on account as I am getting under pressure by my fellow partners and accounts teams who are preparing legal action to recover the outstanding fees. Please can you come back to me asap to deal with this.”
Please can you come back to me asap to deal with this.”[65]This email shows that the First Appellant’s agents were waiting to be placed in funds, and were not merely resting on their laurels and failing to advise the First Appellant. Further emails were sent to the Appellant by GSC on 9 September 2023 and 12 September 2023; one of which states that:
“I have postponed this as I am unable to do any work until our fees are paid.”
[66]There is no documentary evidence before me to support a finding that there was any response to these emails from the First Appellant. As a result, I am satisfied that the First Appellant was aware of both the need to engage with HMRC, and the need to place his representatives in funds. It is unclear what steps the First Appellant was taking to address the need to appeal at this stage, despite having personally received the decisions from HMRC.[67]HMRC later wrote to the First Appellant, by a letter dated 15 September 2023, stating, inter alia, that:
“I have not received an appeal.”
[68]This letter states, unequivocally, that no appeal had been received. The letter further lists the discovery assessments and the closure notices from 2007-08 to 2020-21. The letter is addressed to the First Appellant at Flat 7, 32 Lennox Gardens and there is no suggestion that this letter was returned to HMRC undelivered. Indeed, the First Appellant does not suggest that he did not receive this letter. From the contents of the letter dated 15 September 2023, I am satisfied that the First Appellant was clear that no appeals had been made against the decisions. This should have prompted further action on the part of the First Appellant.[69]Following appointment of new representatives (“Trident”) by the First Appellant, payment proposals were received by HMRC on behalf of the Appellants. A letter, dated 24 November 2023, from Trident to HMRC is set out in the following terms:
“Further to our letter of 20 November and Mr Paterson’s email rejecting the proposals and enquiring specific dates for payments, we are now submitting revised payment proposals. Mr Wimmer has been working on how his payment proposals can be improved… Mr Wimmer will repeat this cycle of payments annually, which will clear the debt in full in 5 years. We look forward to discussing these proposals with a view to a positive resolution.”
We look forward to discussing these proposals with a view to a positive resolution.”[70]Once again, this correspondence shows a focus on settling the debts and does not refer to the June letter as being a ‘protected appeal’, or indeed to any intention to appeal against the decisions. Furthermore, this letter from Trident was after the letter dated 15 September 2023, which, I am satisfied, unequivocally stated that no appeals had been made.[71]Despite the date of the penalty notice (October 2023), the letter from HMRC dated 15 September, and the fact of having appointed Trident as long ago as 26 October 2023, the First Appellant proceeded to appoint new representatives (CTM) on 12 January 2024, without lodging an appeal. Despite CTM being appointed on 12 January 2024, an appeal was only made to HMRC almost a month later on 8 February 2024. When this late appeal was rejected by HMRC, there was a further, unexplained, delay in appealing to the FtT until 26 March 2024. This further delay is unexplained.[72]In respect of the second of the Appellants’ submissions; namely, the inability to instruct agents as a result of the effects of the pandemic (and the financial problems being experienced), in Katib, the UT concluded that the lack of experience of the appellant and the hardship that is likely to be suffered was not sufficient to displace the responsibility on an appellant to adhere to time limits. The duty remained on the Appellants (specifically the First Appellant) to ensure that time limits were complied with. The appellant in Katib was likely to lose his house if the late appeal was not admitted. Whilst this was not a factor that was heavily in the assessment as to whether a late appeal should be admitted, the duty to comply with time limits lies firmly with an appellant as the decision relates to the appellant, and not their agent. In any event, as the UT in Martland noted, at [47]:
“Shortage of funds (and consequent inability to instruct a professional adviser) should not, of itself, generally carry any weight in the FTT's consideration of the reasonableness of the applicant's explanation of the delay...”
[73]Moreover, there is no evidence before me to support a finding that the First Appellant informed HMRC of the impact that any financial issues were having on his ability to lodge an appeal, or move forward with the payment plan that had been canvassed in the past. I am satisfied that this would have been a relatively simple and straightforward thing for the First Appellant to do.[74]As Moore-Bick LJ stated in Hysaj, R (in the application of) v Secretary of State for the Home Department [2014] EWCA Civ 1633 (‘Hysaj’), at [44], that:
“being a litigant in person with no previous experience of legal proceedings is not a good reason for failing to comply with the rules”
[75]Furthermore, whilst not suggesting that the pandemic did not have a significant impact on the majority in society, the appeal period in this application was some three years after the pandemic. The Appellants have not substantiated the claim that the effects of the pandemic prevented them from appealing until 2024.[76]In respect of the third of the Appellants’ submission; namely that Trident were concentrating on dealing with the bankruptcy proceedings over and above lodging an appeal, in Subway London Ltd v HMRC [2019] UKFTT 579 (TC),

Judge Zaman summarised the reasoning of the UT in Katib as follows:

“64… (1) failures by the taxpayer’s adviser should generally be treated as failures by the taxpayer; (2) the general rule that the failure of an adviser to advise the taxpayer of the deadlines for making appeals, or to submit timely appeals on his behalf, is unlikely to amount to a "good reason" for missing those deadlines when considering the second stage of the evaluation required by Martland; (3) when considering the third stage of the evaluation required by Martland, exceptions to the general rule are possible and, if a taxpayer was misled by his advisers, that is a relevant consideration; … (5) the fact that the taxpayer did not have the expertise to deal with the dispute with HMRC himself does not weigh greatly in the balance since most people who instruct a representative to deal with litigation do so because of their own lack of expertise in this arena; … (7) this conclusion is fortified by the fact that there were some warning signs that should have alerted the taxpayer to the fact that the adviser was not equal to the task – the taxpayer was still receiving threats of enforcement action, and the advice to "cease to be a man by making a declaration to this effect" should have alerted the taxpayer to the warning signs; (8) the adviser’s conduct does not have any real weight when considering the factors relevant to the final stage of the three-stage approach outlined in Martland; and (9) whilst the financial consequences of the taxpayer not being able to appeal were very serious because his means were limited such that he would lose his home, this factor was not as weighty as the Tribunal said it was. The core point is that the taxpayer would suffer hardship if he (in effect) lost the appeal for procedural reasons. However, that could be propounded by large numbers of taxpayers, and it does not have sufficient weight to overcome the difficulties posed by the fact that the delays were very significant, and there was no good reason for them.”
[77]I find that the fact that Trident may have been concentrating on avoiding bankruptcy for the Appellants does not absolve the Appellants from adhering to time limits. The First Appellant had personally received the decisions, and was aware of them. I am satisfied that all of the correspondence included in the bundle points to the conclusion that an appeal became an afterthought after discussions about payment proposals, and the issue of bankruptcy became live. This is not the manner in which statutory time limits are to be regarded, and is insufficient.[78]Having considered all of the information before me, I am satisfied that there is no good reason for the failure to make timely appeals. This is not a finding that the First Appellant was deliberately seeking to avoid his liability, but is a balanced appraisal of all of the information before on the issue of whether a good reason has been given for the failure to lodge a timely appeal.

Evaluating all of the circumstances

[79]I turn to the third stage in the process; that of having regard to all the circumstances and the respective prejudice to the Appellants and to HMRC. The case of Global Torch Ltd v Apex Global Management Ltd & Ors (No 2) [2014] 1 WLR 4495, at [29], referred to the merits of the underlying case generally being irrelevant. In Martland, the UT held, at [45] to [46], that the balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently, and at a proportionate cost. The UT also highlighted the need for statutory time limits to be respected. In so doing, the Tribunal must have regard to any obvious strengths or weaknesses in the applicant’s case. As Moore-Bick LJ said in Hysaj, at [46], it is only where the court (or tribunal) can see without much investigation that the grounds of appeal are either very strong or very weak that the merits will have any significant part to play when it comes to balancing the various factors at stage-three of the process. That should not involve any detailed analysis of the underlying merits.[80]During the call on 8 November 2023, the Appellants’ agent discussed how best to pay the outstanding debt. Prior to this, in the June letter, GSC referred to a settlement plan. This does not sit well with any alternative claim that there is strength in any proposed appeals. I have already found that an appeal cannot be an afterthought. I am satisfied that the need to make an appeal was made abundantly clear to the Appellants and their agent(s). The failure to make an appeal, coupled with the debt that has become due cannot tip the balance in favour of the Appellants in light of the lengthy background to this application.[81]The UT in Martland made clear, as is apparent from the recent authorities, that the balancing exercise at this stage should take into account the particular importance of the need for litigation to be conducted efficiently and at a proportionate cost and for statutory time limits to be respected. In that regard, I accept that if the Appellants are unable to pursue their appeals, they will not have an opportunity to challenge the decisions. The courts and tribunals have, consistently, emphasised the public interest in the finality of litigation, and the purpose of a time-limit being to bring finality: see, for example, Advocate General for Scotland v General Commissioners for Aberdeen City [2006] STC 1218 and Data Select. It is important that time limits are observed, and so leave to appeal out of time should therefore only be exceptionally granted. HMRC, and therefore the public in general, have the right to finality in tax affairs. Where a taxpayer does not observe the time limits that should ordinarily be the end of any dispute over liability. As the UT in Romasave, held, at [96]:
“permission to appeal out of time should only be granted exceptionally, meaning that it should be the exception rather than the rule and not granted routinely.”
[82]This was also so in Martland, at [34]:
“… the purpose of the time limit is to bring finality, and that is a matter of public interest, both from the point of view of the taxpayer in question and that of the wider body of taxpayers.”
[83]Having considered all of the evidence, and despite the matters urged upon me by Mr Freund, I am satisfied that the balance between the prejudice to the Appellants, the prejudice to HMRC, and the administration of justice through the finality of litigation falls firmly on the side of an extension of time being refused. I have balanced the competing interests and the arguments presented by the parties.[84]Accordingly, therefore, I hold that the applications to make late appeals are refused.

Right to apply for permission to appeal

[85]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: 10 July 2025