Storm Environmental Limited v The Commissioners for HMRC [2026] UKFTT 1036 (TC)

[2026] UKFTT 01036 (TC)

Case No TC 09955

FIRST-TIER TRIBUNAL

TAX CHAMBER

Hearing Heard on: 26 May 2026

Date Judgment date: 09 July 2026

By remote video

Appeal reference: TC/2025/00375

PROCEDURE: Whether late appeal application can be decided whilst hardship application is still pending – Rule 20(4) and Rule 22(4) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 – Application for permission to notify an appeal to the Tribunal outside the statutory time limit – Application refused

Before

TRIBUNAL JUDGE ROBIN VOS

SIMON BIRD

Between

STORM ENVIRONMENTAL LIMITEDAppellant

THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondent

RICHARD GANLEY, Finance Director of the Appellant for Appellant

CHARLOTTE BROWN of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for Respondents

DECISION

Introduction

[1]The hearing took place by video using Microsoft Teams. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.

[2]The Tribunal delivered its decision orally at the end of the hearing, giving full findings of fact and reasons for the decision. In accordance with Rule 35(3A) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the Tribunal Rules), the written decision notice issued on 29 May 2026 did not therefore contain any findings of fact or reasons for the decision.

[3]The appellant, Storm Environmental Limited (Storm) has, however, applied, by a letter dated 3 June 2026, for a statement of reasons for the decision. This decision notice therefore sets out the Tribunal’s full findings of fact and reasons for the decision.

Background

[4]Storm wishes to appeal against a C18 post clearance demand notice issued by HMRC on 21 November 2023 for £161,262.85 of customs duty and import VAT (the 2023 demand). The underlying issue relates to the correct customs classification code for certain steel bins imported by Storm.

[5]HMRC had issued a similar demand in 2022 using a different customs classification code (the 2022 demand). Storm had notified an appeal to the Tribunal against the 2022 demand within the relevant 30 day time limit. In addition, HMRC had agreed (in accordance with s 16(3) Finance Act 1994 (FA 1994)) that the appeal could proceed without the payment of the VAT/duty in question and without any security being given for the payment of the VAT/duty.

[6]However, in October 2023, HMRC withdrew the 2022 demand as they concluded that they had used the wrong customs code. This was replaced by the 2023 demand, which used a different customs code.

[7]In contrast to the appeal against the 2022 demand, Storm’s appeal to the Tribunal against the 2023 demand was made approximately ten months after the statutory deadline for making an appeal. In addition, HMRC refused Storm's hardship application to allow the appeal to proceed without the payment of the tax/duty and without Storm giving any security for the payment of the tax/duty.

[8]The Tribunal therefore arranged a hearing on 26 May 2026 to determine Storm's hardship application and to decide whether permission should be given to allow the appeal to be notified to the Tribunal outside the 30 day time limit (the late appeal application).

[9]On the morning of the hearing, Storm offered to pay the tax/duty, making the hardship application irrelevant. The only remaining issue for the Tribunal to determine is therefore the late appeal application.

[10]Ms Brown, appearing on behalf of HMRC, submitted that the Tribunal has no jurisdiction to hear a late appeal application in circumstances where hardship has not been granted and the tax has not been paid. She suggested that Storm should give an undertaking to pay the tax within seven days and that, only if it does so, should the Tribunal then determine the late appeal application. She did, however, accept that, as the parties were present (by video) the Tribunal should hear submissions in respect of the late appeal application so that it would be in a position to make the determination if the tax/duty was paid in accordance with the undertaking.

[11]In support of her submission on jurisdiction, Ms Brown referred to Rule 22 of the Tribunal Rules which applies where an enactment (in this case s 16(3) FA 1994) provides that an appeal may not proceed without the consent of either HMRC or the Tribunal if the amount in dispute is outstanding. In particular, Rule 22(4) of the Tribunal Rules requires the Tribunal to stay the proceedings until any hardship application has been determined.

[12]We do not, however, accept this submission. Rule 20 of the Tribunal Rules sets out the provisions which apply to “starting appeal proceedings”. Rule 20(4) of the Tribunal Rules deals with the situation where a notice of appeal is provided to the Tribunal after the relevant statutory time limit for making an appeal. Rule 20(4)(b) provides that the Tribunal must not admit the appeal unless it gives permission for the appeal to be notified to the Tribunal outside the time limit.

[13]In our view, the effect of this is that, until the late appeal application has been determined, the appeal cannot be admitted by the Tribunal and there are therefore no proceedings which can be stayed pending determination of the hardship application in accordance with Rule 22(4). The result of this is that the Tribunal should determine the late appeal application. Only if the appeal is admitted should the proceedings then be stayed pending the payment of the tax or the determination of a hardship application.

[14]Logically, this makes sense; there would be no point in determining a hardship application in circumstances where the Tribunal in any event refuses to admit the late appeal.

[15]We appreciate that s 16(3) FA 1994 provides that an appeal “shall not be entertained” if the tax has not been paid and hardship has not been granted. However, this presupposes that an otherwise valid appeal has been made. In the case of a late appeal, s 16 (1F) FA 1994 provides that “an appeal may be made after the end of the period specified in subsection (1) … if the appeal Tribunal gives permission to do so.” This makes it clear that no valid appeal is made unless and until the Tribunal gives permission. This supports the conclusion that a late appeal application can (and, indeed, should) be determined before any hardship application.

[16]We therefore go on to deal with the late appeal application.

Late appeals – legal principles

[17]The approach to be taken by the Tribunal in determining a late appeal application is well known and is not controversial. The principles were set out by the Upper Tribunal in Martland v HMRC

[2018] UKUT 0178 (TCC)

at [44]-[47] and were recently approved by the Court of Appeal in HMRC v Medpro

[2026] EWCA Civ 14

at [57].

[18]The key principles can be summarised as follows:(1) The starting point is the statutory time limit. It is for the applicant to persuade the Tribunal that permission for a late appeal should be granted.

(2) The Tribunal should establish whether the delay is serious and/or significant. In the context of a statutory time limit of 30 days, a delay of three months or more is likely to be serious/significant (Romasave Property Services Limited v HMRC

[2015] UKUT 0254 (TCC)

at [96]).

(3) If the delay is serious/significant, the Tribunal should then establish the reasons for the delay.

(4) Once this has been done, the Tribunal must weigh up all of the circumstances of the case, including the merits of the reasons for the delay and the prejudice which would be caused to either party by granting or refusing permission. This balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost and for statutory time limits to be respected. The Tribunal can have regard to any obvious strengths or weaknesses of the applicant's case, but this should not descend into a detailed analysis of the underlying merits of the appeal.

[19]In considering the reasons for the delay, as a general rule, the failure of an advisor should be treated as a failure of the applicant (HMRC v Katib

[2019] UKUT 189 (TCC)

at [54] and [58]).

Background facts

[20]Our findings of fact are based on the bundle of documents we were provided with, together with evidence given by Mr Ganley during the hearing. Mr Ganley was a straightforward witness who made appropriate concessions where relevant. We are happy to accept his evidence at face value. We set out our findings of fact below.

[21]HMRC completed their review of the decision to issue the 21 November 2023 post clearance demand notice on 29 February 2024. The review conclusion letter was clear that, if Storm did not agree with the conclusion, it could appeal to the Tribunal within 30 days.

[22]Instead of doing this, the agents acting on behalf of Storm, Maersk Logistics and Services UK Limited (Maersk) wrote to the Tribunal on 15 March 2024 (copy to HMRC) attempting to reactivate the previous appeal against the 2022 demand.

[23]In response to this, on 18 March 2024, HMRC explained to Maersk (copy to Mr Ganley at Storm) that the 2022 appeal could not be revived as the relevant decision had been withdrawn. Instead, the advice was that “You will have to await a new/updated decision from HMRC and begin the appeal process again”.

[24]On 25 April 2024, HMRC asked Maersk/Storm whether they had submitted a new appeal, copying the paragraph from the review conclusion letter confirming that a new appeal had to be submitted to the Tribunal within 30 days. This was queried by Maersk and, on the following day (26 April 2024), HMRC wrote again to Maersk and to Storm explaining why a new appeal had to be submitted. Mr Ganley accepts, on behalf of Storm, that, at this time, it was clear to him that a new appeal needed to be submitted.

[25]Despite Maersk once again confirming with HMRC on 6 June 2024 that a new appeal needed to be submitted, neither Maersk nor Storm took any action until HMRC chased them on 23 July 2024 asking again whether an appeal had been submitted to the Tribunal. Maersk replied on 30 July 2024, confirming that no appeal had yet been submitted, but that Storm still intended to do so.

[26]On 15 August 2024, Mr Ganley contacted HMRC as Storm had received a demand for the payment of the tax. HMRC responded on 19 August to say that they would hold off collecting the tax but that, if no appeal had been submitted to the Tribunal by 31 August 2024, they would release the amount for collection.

[27]Maersk tried to lodge an appeal with the Tribunal on 23 August 2024, but encountered technical difficulties. By 30 August 2024, Maersk had been advised by the Tribunal to submit the appeal by post. On 2 September 2024, HMRC advised that, if this was what the Tribunal had directed, this is what Maersk/Storm should do.

[28]Mr Ganley accepts that Maersk did not in fact send the appeal to the Tribunal by post at this time. This is consistent with the documentary evidence which contains an email on 20 December 2024 from Maersk to HMRC noting that sending the appeal by post was “not ideal” and that the “deadline was missed”.

[29]After 2 September 2024, nothing happened until 17 December 2024 when Storm got in touch with HMRC, having received a letter threatening to wind up the company as a result of the non-payment of the tax/duty which had been demanded.

[30]Mr Ganley's evidence is that Storm was unaware that Maersk had failed to submit the appeal to the Tribunal. Although Mr Ganley was challenged on this point in cross-examination and accepted that, in hindsight, he should have checked with Maersk that the appeal had been submitted, based on Mr Ganley's oral evidence and the correspondence which took place between Mr Ganley and HMRC and Maersk and HMRC in December 2024, we think it more likely than not (and therefore find as a fact) that Mr Ganley (and therefore Storm) did not in fact know that the appeal had not been submitted to the Tribunal until HMRC made this clear to him on 17 December 2024.

[31]Following some further correspondence between HMRC and Maersk/Storm in December 2024 and January 2025, the appeal was eventually submitted to the Tribunal online by Maersk on 28 January 2025.

The length of the delay and the reasons for the delay

[32]As the review conclusion letter was sent to Storm on 29 February 2024, the 30 day period for making an appeal to the Tribunal expired on 28 March 2024 (s 16(1) FA 1994). The appeal was therefore ten months late as it was not submitted to the Tribunal until 28 January 2025. There is no doubt that this is both a serious and significant delay.

[33]Initially, Storm/Maersk tried to reactivate the 2022 appeal. Some confusion was caused by HMRC's email of 18 March 2024 suggesting that they should await a new/updated decision from HMRC before then starting the appeal process again.

[34]This was corrected by HMRC on 25/26 April 2024, at which point it was absolutely clear to Storm that a new appeal needed to be submitted. Although Storm should perhaps have realised that the decision against which it needed to appeal had already been issued on 29 February 2024, on balance we accept that there was a good reason for the delay in submitting the new appeal between 18 March 2024 and 26 April 2024.

[35]However, there is no explanation for the delay after 26 April 2024 until Maersk attempted to submit the appeal to the Tribunal online on 23 August 2024, almost four months later. Mr Ganley submits on behalf of Storm that it was let down by its agent, Maersk which, he suggested, displayed a “lack of urgency”.

[36]Whilst this may be true, as we have seen, the general rule is that a failure by an adviser should be treated as a failure by the litigant (Katib at [54]). In any event, Storm was copied into all of the relevant correspondence and, as Mr Ganley accepts, was well aware that a new appeal needed to be submitted and that the time for appealing had long since passed. There is no evidence that Storm had been chasing Maersk to get the appeal submitted in the period between April 2024-August 2024. Given that there was over £160,000 of tax at stake, this seems surprising.

[37]We do not therefore consider that there was any good reason for the delay between 26 April 2024 and 23 August 2024, particularly bearing in mind that HMRC confirmed on 6 June 2024 that a new appeal needed to be submitted and enquired again on 23 July 2024 whether an appeal had in fact been submitted.

[38]It is clear from the evidence that there were technical problems in submitting the appeal to the Tribunal online between 23 August 2024-2 September 2024, by which time it was clear to Maersk (and to Storm which was copied into the correspondence) that the appeal should be submitted by post. We accept that there was a good reason for the failure during this ten day period.

[39]However, after 2 September 2024 up to 17 December 2024, there is no explanation for the delay other than the comment by Maersk on 20 December 2024 that the option of submitting the appeal by post was “not ideal”, without any reason being given as to why this should have been the case.

[40]As we have found, Storm was not aware that the appeal had not been submitted. However, again, we do not consider this to be a good reason for the delay. As Mr Ganley accepted in his evidence, Storm should have checked whether Maersk had in fact submitted the appeal.

[41]Mr Ganley complains that there was no correspondence from HMRC to alert Storm to the fact that no appeal had been made to the Tribunal. However, it is hard to understand how Storm could simply have assumed that the appeal had been submitted by Maersk without any confirmation that it had in fact done so.

[42]As mentioned above, given that there was over £160,000 of tax at stake, we would have expected that Storm would have wanted to be sure that the appeal had been lodged with the Tribunal. There was, therefore, in our view, no good reason for the delay during this period.

[43]Even after 17 December 2024, when HMRC confirmed that no appeal had been lodged with the Tribunal, it took another six weeks before the appeal was finally submitted.

[44]There is some suggestion in an email from Maersk to HMRC that part of the reason for the delay was the need to collate the relevant information. However, given that the correspondence clearly shows that Maersk attempted to submit an appeal to the Tribunal online on 23 August 2024, it is difficult to see that much work could have been needed in order to collate everything necessary to make the appeal. We do not therefore consider that there was any good reason for this further six week delay.

[45]We should record that it is clear that Storm was seriously let down by Maersk, which not only showed no sense of urgency but, based on the correspondence, appeared to have little expertise in making such appeals. However, in our view, there is nothing in the circumstances of this case which would justify a departure from the general rule that the failure of an advisor should be attributed to the litigant (see Katib). On the contrary, in this case, Storm was fully aware since 26 April 2024 that an appeal needed to be submitted to the Tribunal as soon as possible but does not appear to have taken any action to ensure that this was done.

[46]One other point relied on by Mr Ganley is that Storm had thought that the deadline for making an appeal to the Tribunal had been extended to 31 August 2024. This is based on HMRC's email of 19 August 2024 in which HMRC agreed not to take enforcement action to collect the outstanding tax if the appeal was submitted by 31 August 2024.

[47]As submitted by Ms Brown, we do not consider that, on a fair reading of this email, it could be interpreted as an extension of the statutory deadline for making an appeal. It deals only with the process for collecting the outstanding tax. In any event, it does not explain the delay between 26 April 2024-19 August 2024. Nor does it have any bearing on the delay in submitting the appeal after 2 September 2024.

[48]In summary, there was a serious and significant delay of ten months in making the appeal. There were good reasons covering about two and a half months of that ten month period of delay. However, there is no good reason for the remaining seven and a half months of delay.

Weighing up all of the circumstances

[49]The starting point is that permission to make a late appeal should not be granted unless the Tribunal is persuaded that it is right to do so.

[50]In this case, there was a serious and significant delay in submitting the appeal to the Tribunal. For most of the period of the delay (seven and a half months out of ten months) there was no good reason for the delay.

[51]Mr Ganley submits that, at all times, HMRC was aware that Storm wished to make an appeal to the Tribunal and that there would therefore be little prejudice to HMRC if the Tribunal were to give permission for the late appeal to proceed.

[52]As far as prejudice to Storm is concerned, Mr Ganley observes that, not only is there prejudice in having to pay the outstanding tax, it will also be at a disadvantage compared to its competitors if it has to continue to apply what it considers to be the incorrect customs code and to pay the tax/duty which results from that. In this context, Mr Ganley mentioned (without waiving privilege) that Storm has obtained an opinion from King's Counsel to the effect that it has a strong case that the customs code which it has applied is correct.

[53]Mr Ganley also draws attention to the history of the appeal whereby a valid appeal had been made against the 2022 demand which was then withdrawn by HMRC and replaced with the 2023 demand.

[54]Having considered all of these points, we are not persuaded that it is appropriate to give permission for the appeal to be notified to the Tribunal outside the statutory time limit.

[55]The fact that there was a serious delay, for most of which there is no good reason, points strongly to refusing permission to make the late appeal, particularly when taking into account the need for time limits to be respected.

[56]As has been repeatedly observed by this Tribunal and by the Upper Tribunal, the reason for the existence of a time limit for making appeals is the need for finality in tax matters so that both HMRC and taxpayers know where they stand.

[57]Although (as we accept) there may be little prejudice to HMRC if the appeal were to proceed, as Ms Brown submits, they would still have to devote resources to defending the appeal. In addition, the appeal would use resources of the Tribunal, which would affect other taxpayers who have made valid appeals within the relevant time limit. There would therefore be some prejudice both to HMRC and to the wider public in permitting the appeal to proceed.

[58]It is, in our view, also not correct to say that HMRC have always known that Storm wished to make an appeal to the Tribunal. For example, after 2 September 2024, with no appeal having been submitted, it would not be surprising if HMRC concluded that Storm had changed its mind about appealing. Having said that, we do not consider that this has any material impact on the question as to the extent of any prejudice to HMRC in this case and so we do not place any weight on this point.

[59]We acknowledge that there would be prejudice to Storm in having to pay the tax due and for it not to be able to contest the liability. However, as the Upper Tribunal made clear in Katib at [60], this is always the consequence of a refusal to give permission to make a late appeal and is unlikely to be sufficient, on its own, to tip the balance in favour of giving permission where there has been a significant delay for which there is no good reason.

[60]As far as the competitive disadvantage mentioned by Mr Ganley is concerned, we do not accept this. The inability to contest the 2023 demand does not prevent Storm from continuing to apply the customs code which it believes is correct. Should HMRC issue a further demand, it can appeal against that demand in the normal way.

[61]Turning to the history of the appeal, we do have some sympathy for Storm as, had the 2022 demand not been withdrawn, it would have had a valid appeal before the Tribunal with hardship granted. In addition, it was clearly led to believe at an online meeting with HMRC in November 2023 (when the withdrawal of the 2022 demand and the proposed making of the new 2023 demand was explained by HMRC) that the granting of hardship for any new appeal would be a formality. However, in our view, this is not a good reason for granting permission to make a late appeal against the 2023 demand in circumstances where it has been clear since 26 April 2024 that a new appeal had to be submitted but no appeal was in fact submitted until January 2025.

[62]Whilst Mr Ganley invites us to take into account what Storm considers to be the strength of its underlying appeal, we are not able to do so. Determination of the correct customs code will be highly fact specific and we simply do not have the evidence to even begin to reach any tentative conclusions as to what the correct customs classification should be. This would be the sort of detailed exercise which the Upper Tribunal in Martland warned against conducting when determining a late appeal application. We cannot therefore say that the prospects of Storm succeeding in any appeal are either very strong or very weak. This is not therefore a factor which we have taken into account in reaching our decision.

Conclusion

[63]For the reasons explained above, having taken into account all of the relevant circumstances, we are not persuaded that it is appropriate in this case to give permission to Storm for its appeal to be notified to the Tribunal outside the statutory 30 day time limit. The late appeal application is therefore dismissed and the Tribunal will close its file.

[64]For the avoidance of doubt, we make no decision in relation to the hardship application as it is no longer relevant given our decision to refuse to admit the late appeal and in the light of the fact that Storm would have been willing to pay the tax in order to allow the appeal to proceed in any event.

Right to apply for permission to appeal

[65]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: 09 July 2026