247 Jobline Limited v The Commissioners for HMRC [2026] UKFTT 1146 (TC)
[2026] UKFTT 01146 (TC)Case No TC 09980
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 23 March 2026Date Judgment date: 06 August 2026
Sitting at Taylor House, London
Appeal reference: TC/2022/02260 (1)
TC/2022/02278 (2)
TC/2022/10985 (3)
TC/2025/01625 (4)
VALUE ADDED TAX – six appeals by related parties against assessments, penalties and personal liability notices – all six appeals struck out for failure to comply with directions and breach of Unless orders – ten months later, application for reinstatement made by two of the appellants in respect of three of the appeals – Chappell applied – whether those appeals should be reinstated – no
VALUE ADDED TAX – application by appellant to make appeal – length of delay was 34 months – Martland applied – whether permission to make late appeal granted – no
Before
TRIBUNAL JUDGE BAILEY
Between
247 JOBLINE LIMITEDAppellant(3) (4) MAAZ MOHIUDDINAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Mohiuddin represented himself and the First Appellant for AppellantJoshua Carey of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for RespondentsDECISION
Introduction
[1]These proceedings consist of one application for reinstatement made by the First Appellant, two applications for reinstatement made by the Second Appellant, and an application by the Second Appellant to make a late appeal.
Background
[2]All four of these applications now before the Tribunal arose out of an investigation which HMRC conducted in 2021 and 2022. That investigation was into three related companies. At the time of the investigation, the Second Appellant was the sole director of two of these companies, with the sole director of the third of these three companies being one of the Second Appellant’s brothers. During the course of their investigations, HMRC engaged with a person who held himself out to be the Second Appellant and who also stated that he had authority to act on behalf of the third company. HMRC believed that person to be the Second Appellant. As a result of their investigations HMRC concluded that there was a loss of tax, that the companies should be de-registered from VAT, and that VAT assessments should be raised. Subsequently, a Section 69C VATA 1994 penalty was issued to each of the three companies and, in respect of each of the penalties, a Personal Liability Notice (“PLN”) was issued to the Second Appellant under Section 69D VATA 1994.[3]Following the issue of the penalties and PLNs, six appeals were filed to the Tribunal in 2022. One of those appeals was in the name of the First Appellant, and was made against the Section 69C penalty. Two of the appeals were in the name of the Second Appellant, and were appeals against two of the PLNs. (The other three appeals were brought by the other two related companies.) At various dates the appellants to all six appeals failed to comply with Tribunal directions. The three appeals which are the subject of these reinstatement proceedings were struck out on 23 April 2024, and the Tribunal confirmed this to parties on 10 May 2024.[4]The reinstatement proceedings come about because the Second Appellant says that he had no interaction with HMRC during the investigation and no knowledge of the Tribunal proceedings begun in 2022, and that he was impersonated by a Mr MU, who is another of his brothers. The three applications for reinstatement were initially filed on 5 March 2025, and amended on 10 March 2025.[5]The Second Appellant’s application for permission to make a late appeal (against the third PLN) was filed with the Tribunal on 14 March 2025. This third PLN had been upheld on review on 20 April 2022, and so the deadline for making an in-time appeal to the Tribunal was 20 May 2022. Therefore the Second Appellant’s appeal is 1,030 days (or just under two years and ten months) late.
Outcome
[6]As this is a long decision, I consider it appropriate to set out the outcome at the onset. For the reasons set out below: - the First and Second Appellants’ applications for reinstatement are refused; and - the Second Appellant’s application to make a late appeal is refused.[7]I appreciate that this will be a very disappointing outcome for the Second Appellant. The final paragraph of this decision explains what he should do if he wishes to seek permission to appeal, and the relevant time limits.
Evidence before the Tribunal
[8]The Tribunal had the benefit of a hearing bundle consisting of 795 pages. In addition, the Appellant made an application for the late admission of various documents following HMRC’s response to Subject Access Requests, and HMRC provided a late supplementary bundle. I admitted all of these additional documents into evidence. On the day of the hearing, the Appellant also provided two additional authorities and some extracts from HMRC’s manuals, which were considered.[9]The Tribunal heard oral evidence from the Second Appellant and from Mr Rafik Hassam, a HMRC officer, both of whom were cross-examined. For both witnesses some time has passed since the events in question. In my approach to the oral evidence, I kept in mind the comments in Gestmin v Credit Suisse [2013] EWHC 3560 (Comm) about the fallibility of memory, the mind’s ability to revise past memories to accord with current beliefs and the desirability of tribunals and courts placing greater reliance on contemporaneous documents than contradictory assertions that are made only once the significance of issues is known.[10]I found Mr Hassam to be a candid, careful and honest witness who was doing his best to assist the Tribunal and I accept his evidence. However, due to the passage of time, Mr Hassam had little to add that could not already be found or deduced from the documents before the Tribunal.[11]Much of the Second Appellant’s evidence deteriorated into combative submissions or counter-questions rather than providing an answer to the questions asked. While I appreciate the very stressful nature of these proceedings for the Second Appellant and his concern about the consequences for him if he is not successful, some of the answers he gave in his oral evidence were not credible when placed in the context of the contemporaneous documentary evidence (and the inferences to be drawn from the absence of other contemporaneous documentary evidence). While I accept some parts of the Appellant’s evidence, overall I did not consider the Second Appellant’s evidence to be convincing or reliable.
Facts
[12]The First Appellant was incorporated on 20 February 2014. The Second Appellant became the sole director and company secretary. From incorporation, the Second Appellant held all of the shares in the First Appellant. The First Appellant’s registered address was initially an address in south London (the “Charlton Court” address) which was (and still is) the correspondence address registered at Companies House for the Second Appellant.[13]In 2015 the First Appellant’s name was changed (to its current name) and its address was changed. The First Appellant appears to have begun trading around the winter of 2015/2016, and a charge was registered in March 2017. In October 2018, the First Appellant’s address was changed to an address that began “Suite 10, Roding House” (the “Roding House” address). This remained the First Appellant’s registered address until 13 February 2025.[14]In July 2015, one of the two related companies, 121 Jobs Limited, was incorporated. Neither the Second Appellant nor MU was an initial director or shareholder but in December 2017, another brother of the Second Appellant became director. In April 2018, this company changed its registered address to the Roding House address.[15]In April 2016, the third related company, The Jobline Limited, was incorporated. The Second Appellant was the sole director and he held 100% of the shareholding. This company’s registered address was initially an address in north London. In October 2018, the company’s name was changed (to its current name) and in December 2018, the company’s address was changed to the Roding House address.
HMRC’s investigations
[16]In February 2021, HMRC began a check into each of the three companies.[17]On 16 February 2021, an opening letter was sent to each of The Jobline Limited and 121 Jobs Limited at their registered address, asking to see various records. A similar letter was sent to the First Appellant on the same date but this was addressed to “the director” of the First Appellant, and sent to the Charlton House address.[18]Ten days later, a person claiming to be the Second Appellant telephoned and emailed HMRC. In the telephone call the person said that some correspondence had not been received because of lockdown but he provided an email address to be used for future communication with The Jobline Limited. In the email, the person claiming to be the Second Appellant asked that future correspondence be emailed to him and copied to SW of Agent 1 (who at that time was the accountant acting for all three companies). On the same day, the director of 121 Jobs Limited also emailed HMRC to ask that communications be sent by email and copied to SW of Agent 1.[19]SW of Agent 1 subsequently provided a missing authorisation to enable communication with HMRC, and then telephoned HMRC to discuss the documents that HMRC required.[20]On 31 March 2021, there was a telephone meeting between two HMRC officers and a person claiming to the Second Appellant. No one from Agent 1 attended this call. The person claiming to be the Second Appellant described the running of the three connected companies and the use of a self-employed consultant to manage the businesses due to the commitment of his own full time employment.[21]There was subsequent email correspondence between HMRC and the person claiming to be the Second Appellant, with more time sought for The Jobline Limited to provide the records HMRC required.[22]On 12 April 2021, there was a telephone meeting between the person claiming to be the Second Appellant, two HMRC officers and NH from Agent 2. The discussion largely reiterated the discussion on 31 March 2021 about the operation of the three companies and how they conducted business. At this meeting the person claiming to be the Second Appellant stated that he had taken time off from his employment to deal with HMRC’s checks but that he otherwise worked full time.[23]In April 2021, HMRC were provided with authorisation from The Jobline Limited and 121 Jobs Limited, both appointing Agent 2 to act on their behalf during HMRC’s enquiry. HMRC subsequently tried to set up a meeting with the director of 121 Jobs Limited but that director said that he was working abroad and that he authorised HMRC to discuss anything relevant to 121 Jobs Limited with the Second Appellant. A telephone meeting took place on 21 April 2021 between HMRC, NH from Agent 2 and a person claiming to be the Second Appellant. Again the discussion largely reiterated the discussion on 31 March 2021.[24]Either The Jobline Limited or Agent 2 appear to have sent some records to HMRC at some point in April 2021, as, on 29 April 2021, HMRC sought additional records from The Jobline Limited, including due details of the due diligence conducted on some of the companies in The Jobline Limited’s supply chain. A person claiming to be the Second Appellant telephoned HMRC the next day to seek more time. HMRC agreed this extension of time.[25]On 5 July 2021, HMRC sent a tax loss letter to the First Appellant at the Charlton House address registered on Companies House as the correspondence address for the Second Appellant. This advised that recent transactions between the First Appellant and specified suppliers had been traced back to fraudulent tax losses.[26]A tax loss letter in similar terms was sent to 121 Jobs Limited and The Jobline Limited, at the Roding House address. On 13 July 2021, there was a telephone call between two HMRC officers, the person claiming to be the Second Appellant and NH of Agent 2. This call related to all three companies, the tax loss letters sent to all the three companies concerning tax loss in their supply chains and the due diligence that was being conducted by the three companies.[27]On 23 August 2021, HMRC emailed the director of 121 Jobs Limited to ask for more documents. This email was copied to Agent 2.[28]On 25 August 2021, HMRC issued a VAT assessment to The Jobline Limited for the periods 07/19 to 01/21. HMRC denied The Jobline Limited to right to recover input tax on the Kittel basis, and issued a penalty under Section 69C VATA 1994 calculated at 30 % of the tax loss. This correspondence was posted to The Jobline Limited at its registered address, emailed to the email address provided for The Jobline Limited and also emailed to Agent 2.[29]On 9 September 2021, HMRC emailed the First Appellant to repeat a request for bank statements and to check it was convenient to visit the First Appellant on 21 September 2021. NH of Agent 2 responded, suggesting it would be better to meet at Agent 2’s offices as access was restricted to the First Appellant’s office due to non-payment of rent. HMRC noted that restricted access had not previously been mentioned by the person claiming to be the Second Appellant, and the request for a meeting at the First Appellant’s place of business was repeated. NH stated a meeting would not be possible in September but he would check and suggest October dates.[30]On 16 September 2021, HMRC emailed NH: Thank you for your email. I don’t want to drag it on and neither does [the Second Appellant] from what he told me. I had a conversation with [the Second Appellant] yesterday, and he told me that the premises have been handed back to the landlord as of 1 September 2021. HMRC have not been told the new address of the businesses. Can this be updated on our system immediately, and can you let me know the correct address. [The Second Appellant] told me he wants his Self-employed manager to be present as he is more familiar with the day to day running of the businesses. I have no objection to this. Please let me know have at least a couple of dates that will suit you and your client so that I can arrangements on my side. Please let me have a response to both above by the end of the day today.[31]NH confirmed he would be available from 22 September 2021, and that the Second Appellant would confirm the new office address to HMRC. On 21 September 2021, HMRC emailed NH to say that the Second Appellant had confirmed that the First Appellant had access to the premises until the end of September so NH should propose convenient dates for meeting. NH suggested HMRC liaise with the Second Appellant directly. HMRC emailed the person who claimed to be the Second Appellant, who replied to say that he had flu symptoms and would be testing for Covid-19. This person also asked that HMRC liaise with the agent due to the toll on his health of HMRC’s enquiries.[32]On 25 October 2021, HMRC chased Agent 2 for the documents he had asked 121 Jobs Limited to provide at the end of August 2021. Agent 2, the director of 121 Jobs Limited and the person claiming to be the Second Appellant had already been chased in September 2021. On 22 November 2021, HMRC emailed the director of 121 Jobs Limited to remind him that he had responsibilities as a director. NH of Agent 2 was copied to this email.[33]On 15 December 2021, HMRC issued a Kittel decision and penalty assessment to 121 Jobs Limited. These decisions were posted to the registered address for 121 Jobs Limited (which remained the Roding House address), emailed to the director of 121 Jobs Limited and the email address given for email communications, and copied to Agent 2.
The personal liability notices
[34]Meanwhile, on 11 October 2021, HMRC had sent two letters to the Second Appellant at the registered address for both The Jobline Limited and the First Appellant (which remained the Roding House address on both HMRC’s systems and at Companies House), to inform him that HMRC were considering making him personally liable for the penalties issued to The Jobline Limited and to the First Appellant.[35]Later that same day, NH of Agent 2 telephoned HMRC to say that the Second Appellant did not know about the fraud in the supply chain, could not afford to pay the penalties and would lose his job. NH asked if personal liability could be avoided. HMRC said they were willing to consider another person if there was evidence that other person was the controlling mind behind the transactions.[36]On 21 October 2021, HMRC received an email from The Jobline Limited which suggested that the person who had introduced The Jobline Limited to the relevant defaulting companies should be made liable for the penalty. HMRC replied to state that they would only consider making another person liable if there was evidence of that other person being responsible for running The Jobline Limited’s business.[37]On 26 November 2021, HMRC issued a PLN to the Second Appellant, making him personally liable to pay 100% of the penalty issued to The Jobline Limited. This was posted to the registered address for The Jobline Limited, and emailed to the email address for The Jobline Limited. This letter was re-issued to the same addresses on 29 November 2021.[38]On 29 November 2021, HMRC issued a PLN to the Second Appellant, making him personally liable to pay 100% of the penalty issued to the First Appellant. This was posted to the Roding House address (which remained the registered address for the First Appellant).[39]On 15 December 2021, HMRC emailed a letter addressed to the Second Appellant to warn him that HMRC were considering making him personally liable for the penalty that had been issued to 121 Jobs Limited. That letter was emailed to the email address given for 121 Jobs Limited, and copied to the director of 121 Jobs Limited and Agent 2.[40]On 17 January 2022, HMRC issued a decision to the Second Appellant, making him personally liable as shadow director for the penalty issued to 121 Jobs Limited. This was copied to the director of 121 Jobs Limited.
HMRC’s review decisions relevant to these applications
[41]On various dates, HMRC were asked to conduct a review of the decisions to issue penalties and PLNs. Some of these review requests were made out of time but HMRC agreed to accept these late requests. All of the review decisions upheld the original decisions issued.[42]On 10 March 2022, the person claiming to be the Second Appellant emailed HMRC, forwarding part of an email from LA of Agent 3. In the forwarded email, LA wrote to the Second Appellant that there seemed to be some missing correspondence from HMRC. In the email to HMRC sent from the person claiming to be the Second Appellant, the sender informs HMRC that LA of Agent 3 had been instructed and asks HMRC to provide LA with copies of the correspondence that LA believed to be missing. In this email it is stated: As you know we are no longer in the offices but we still have been getting post from HMRC there, which gets picked up from time to time, and we have now stopped getting emails from HMRC therefore missing some correspondence.[43]HMRC replied on 11 March 2022, asking for authorisation from each of the three companies and from the Second Appellant personally, so that HMRC could communicate with Agent 3. HMRC also stated that the Second Appellant should: 2. Update the Business address on HMRC systems so that correspondence is sent to the correct address 3. If you want to continue to communicate by email, please let me have confirmation that you understand the risks and are willing to continue to communicate via email. Confirm the email addresses. 4. If you want me to correspond with your new agent by email, please confirm this and let me have their full details.[44]Also on 11 March 2022, the person claiming to be the Second Appellant emailed HMRC, asking for the PLNs issued to him in respect of the penalties issued to the First Appellant and to 121 Jobs Limited be reviewed, and also asking for a review of the penalty issued to 121 Jobs Limited.[45]On 13 April 2022, HMRC issued a review conclusion letter to the Second Appellant (sent to the registered address for 121 Jobs Limited, which remained the Roding House address) upholding the decision to make the Second Appellant personally liable for the penalty issued to 121 Jobs Limited.[46]On 20 April 2022, HMRC issued a review conclusion letter to the Second Appellant (sent to the Roding House address) upholding the decision to make the Second Appellant personally liable for the Section 69C penalty issued to the First Appellant.[47]Also on 20 April 2022, HMRC issued a review conclusion letter to The Jobline Limited, upholding the decision to issue a Section 69C penalty. On 26 April 2022, LA from Agent 3 emailed the HMRC review officer as follows: Please be advised that we have been provided with your Review Conclusion Letter (attached) and were instructed before the Review was concluded. I have been on holiday, so today is the only time I could respond. I had excepted a letter to the client stating that you were instructed and to provide additional material to you. The client has stated that he did not receive such a letter. Can you confirm where it was sent to. We had waited for that letter before providing additional material to the allocated Review Officer. The client does have very significant additional information/material to provide, in that he played no part in the transactions and that his brother controlled all aspects of trading. Please let me know if you would be willing to review additional material now. The client is subject to numerous decisions and we had sought to deal with all matters at one time. We had hoped that this would be that time. I also attached the Grounds of Appeal and appeal documents for a 69D penalty (The Jobline Limited) and you will see the reasons why no such penalty should be allocated to our client. The role of the brother was made clear during VAT visits. Given the grounds of all appeals will involve the same defence, namely that he was a director in name only, we ask the Commissioners how they would prefer to proceed in order to prevent substantial, costly litigation against the wrong person. I have copied in the Case Officer so that he may consider this. I attach the COMP1 that authorised me to deal with this one matter and COMP1’s for associated companies.[48]HMRC replied on 5 May 2022: You say that you have substantial evidence to show that it was [the Second Appellant’s] brother who was responsible for the tax losses. This was not provided to me when I wrote to [the Second Appellant] for representation. It will be up to the tribunal to decide your appeal, however I will be happy to look at the evidence you say is very significant to show that it was his brother who controlled all aspects of trading. Please let me have your response by 18 May 2022.[49]On 11 May 2022, LA from Agent 3 emailed HMRC to state that the Second Appellant had appealed to the Tribunal against the PLN. In this email, LA also stated that he and the Second Appellant were still awaiting HMRC’s review decision in respect of the Section 69C penalty issued to The Jobline Limited. HMRC responded to explain this review decision had been issued on 20 April 2022 and that HMRC were receiving bounce-backs from emails sent to the Second Appellant.[50]HMRC and LA spoke by telephone on 1 June 2022. HMRC’s note of this call records LA as stating that: The agent then went onto say that he is asking for an ADR as the companies were controlled by the trader's brother and his brother will be present at the ADR.[51]There was further correspondence between HMRC and Agent 3 concerning HMRC’s requirement that there be updated authorisation from the Second Appellant. On 8 July 2022, HMRC wrote to Agent 3 explaining: [The Second Appellant] had told me that he did not have access to the Roding House address and does not receive the post. It is absolutely essential that HMRC records are updated with the correct address if that is the case. The appeals and the COMP1s all show this same address. Does this mean that he now has access to the address and will received HMRC correspondence? I can only communicate using the emails that the trader has provided for me to communicate with. If the trader wants me to use the email address on the Appeals as suggested by in one of your emails, then your client will need to confirm that to me via email directly or through you. He will also need to confirm any other email addresses he wants me to use for communicating including yours.[52]On 22 July 2022, HMRC and Agent 3 received an email from a different email address. The email was signed as if it came from the Second Appellant. This email provided the Charlton Court address as the updated correspondence address, and asked HMRC to send Agent 3 a copy of the missing review decision and to communicate via Agent 3. On 8 August 2022, a further email from this email address provided HMRC with signed authorisation forms, including one for 121 Jobs Limited that was signed by the director of 121 Jobs Limited.
The 2022 appeals to the Tribunal
[53]Over the course of four appeals, each of the three companies appealed to the Tribunal against the refusal of input tax and the Section 69C penalty that had been issued. These four appeals were filed on the Tribunal’s online portal. In addition, two further appeals were filed with the Tribunal behalf of the Second Appellant. These appeals were against two of the PLNS that had been issued to the Second Appellant. At this time, the Second Appellant did not appeal against the PLN that had been issued to him in respect of the penalty issued to the First Appellant.[54]In total six appeals were filed in 2022. For all six appeals, the Roding House address was given on the notice of appeal form as the relevant address for the appellant (whether that was a company or the Second Appellant). In each appeal, Agent 3 was authorised to act on behalf of the relevant appellant in the Tribunal proceedings.[55]In respect of these appeals, it is relevant to note the grounds of appeal provided on behalf of the Second Appellant. These grounds of appeal included the following paragraphs: 4. Although the Appellant was the official director at the time, he was not involved in authorising or conducting any transactions. He conducted no work at all regarding the outsourcing of payroll services and had a full-time job elsewhere for all but a short period. He simply established the company, set up a bank account and met with HMRC because he was the official director. 5. His brother, [MU] made all the decisions, was in charge of all operational matters and was exclusively responsible for the payroll outsourcing. It is disputed that any personally penalty should be raised, but, if one was to be raised, it can only be issued to [MU] as the controlling de facto director.[56]All six of these appeals were acknowledged by the Tribunal and served on HMRC. On various dates in 2022, and following HMRC’s acceptance that hardship applied in respect of some of these appeals, each of the six appeals was categorised as Complex.[57]HMRC objected to the lateness of the two appeals made by The Jobline Limited, and on 6 October 2023, the Tribunal issued directions to progress those two appeals to a hearing at which the lateness would be considered. The Tribunal stayed the remaining four appeals.[58]At some point Agent 3 came off the record for all of the appellants, and the Tribunal communicated directly with the appellants at the email addresses provided to the Tribunal on each Notice of Appeal form.[59]The Jobline Limited did not comply with the directions issued by the Tribunal. The Tribunal chased The Jobline Limited on 4 December 2023, and then issued an Unless order to The Jobline Limited on 31 January 2024. The Jobline Limited did not respond or comply, and both of its appeals were stuck out automatically on 14 February 2024 due to that failure to comply. This was confirmed to the parties on 5 March 2024.[60]Directions were issued to progress the remaining four appeals but the other companies and the Second Appellant did not comply. An unless order was issued on 9 April 2024 but these appellants still did not comply. The remaining four appeals were struck out automatically on 23 April 2024 due to that failure to comply. This was confirmed to the parties on 10 May 2024.[61]The Tribunal letters of 10 May 2024, explained to the First and Second Appellants that any application for reinstatement should be received within 28 days (i.e. by 7 June 2024). No application was received by this date. The Tribunal files for all six appeals were subsequently closed.[62]On 27 August 2024, The Jobline Limited went into liquidation.
Contact from HMRC’s publication team
[63]On 3 January 2025, HMRC wrote to the Second Appellant at his home address to inform him that HMRC were considering publishing his and the First Appellant details, as they were both persons who were liable to pay penalties relating to VAT fraud.[64]In mid-February 2025, some changes were registered at Companies House for the First Appellant. On 13 February 2025, the First Appellant’s registered address was changed from the Roding House address to an address in central London. On 14 February 2025, the Second Appellant resigned as director of the First Appellant. He was replaced by MU. The correspondence address registered at Companies House for the Second Appellant remained the Charlton Court address.[65]On 3 March 2025, HMRC received an email from a person claiming to be the Second Appellant. In this email, it was stated: I have received your letter, however, I would like to clarify some points which are in error You mentioned that I attended three meetings during which I explained how the business operated. I did not attend any meetings with HMRC, not have any conversations regarding the business. These would have been attended by MU, who I mentioned was the shadow director and ran the company. I do not know who else attended those meetings. I was not there. Secondly, you mentioned that on the 29th of Nov 2021, HMRC wrote to me notifying me about a company officer’s penalty under section 69D VATA 94. I did not receive this letter, not did I write to you on the 11th of March 2024. This was all done by MU. MU spoke to [AM] at HMRC regarding this matter and [AM] can confirm that he was made aware of the fact that I was not running any aspect of the company. MU was solely running the company. MU has had some health issues and did not respond to the HMRC communications in time. He has spoken to [AM], and following that, appointed [LA] to reinstate the appeal and to be correctly appointed as the company officer in charge of 247 Jobline Ltd. I have never had more than a cursory involvement in the company and did not know about operational side of the business. This was all dealt with by MU. MU, who I have CC’d in here, will attest to being the director and to my nominal role. If you would like further information or evidence confirming the above, I can provide it.[66]Also on 3 March 2025, HMRC received two telephone calls. The first telephone call was from a person claiming to be MU. In HMRC’s note of this call, it is recorded that the person calling said that he was responsible for all three of the companies and the Second Appellant had no involvement. The note of call continued: 4. [MU] accepted that he was a fraudster for impersonating his brother, but said he did it to maintain family unity. [MU] said that if his brother had become aware of the HMRC investigations into the company and that he was 'on the hook' for anything, it would have tore his family apart. [MU] said for that reason he tried to keep everything quiet in the hope that he would be able to resolve everything and his brother would never have found out about it. 5. [MU] said he was now racked with guilt as his brother had a good job and if his brother's name was published by HMRC on a defaulters list, it would affect his brother's job (he would possibly lose his job). 6. [MU] said that by telling AM all of this, it was as though a wait had been lifted off his chest as he had been carrying this baggae around with him for years. 7. [MU] said he was going to instruct [LA] to make an application to reinstate these proceedings as he felt that would possibly delay HMRC from publishing anything. AM said he did not work in the publishing team and had no idea what, if anything, would stop the publishing team from publishing details of the case.[67]It is unclear why HMRC was told in March 2025 that a weight had been lifted from MU as a result of telling HMRC, when it is clear from the 2022 emails and notices of appeal that that the same version of events had been given to LA of Agent 3 by March 2022, and was set out in the Notices of Appeal filed with the Tribunal and served on HMRC at that time.[68]The second telephone call HMRC received on 3 March 2025 was from a person claiming to be the Second Appellant. In HMRC’s note of this call records: [The Second Appellant] asked if AM [the HMRC officer] had spoken to his brother, [MU]. AM confirmed he had. [The Second Appellant] said he had absolutely no involvement in any of these companies, he was purely just the director on paper. [The Second Appellant] said that [MU] did not tell him about the HMRC investigation(s) and that the first he was aware of anything was recently, when he received a letter from the HMRC publishing team. [The Second Appellant] asked AM what he could do to stop anything being published and AM said he would have to speak to the publishing team. [The Second Appellant] then asked AM what he could do to resolve everything and AM told him that his options were limited because the proceedings had now concluded with all of the appeals being struck out. [The Second Appellant] said he was going to re-instruct [LA of Agent 3] - at which point AM told him not to say anything further in case he prejudices any action [LA] may take for him. [The Second Appellant] accepted this and said in the meantime, he would get in touch with the publishing team and see what he could do. AM confirmed that he would also update the publishing team.[69]I have noted that the note of call refers to re-instruction of Agent 3, not the instruction for the first time of Agent 3. As this is HMRC’s note of the call, and could have been a mis-hearing, I do not take this aspect of the telephone note into account when making my further findings below.
The reinstatement applications to the Tribunal
[70]On 5 March 2025, a reinstatement application was made on behalf of the First and Second Appellants. This was filed by LA of Agent 3. As the new director of the First Appellant, MU authorised the Tribunal to communicate with Agent 3.[71]This initial reinstatement application was amended by LA on 10 March 2025. In the amended application, LA stated: Why were Appeals Struck Out 7. The Appellant was aware that personal penalties were issued and was extremely concerned as he had not met or spoken to HMRC and had not seen any HMRC correspondence. 8. The Appellant authorised [Agent 3] to act on his behalf for the Tribunal and was to attend as a witness. However, he allowed his brother ([MU]) to be the [Agent 3] contact throughout the appeal process given [MU] was responsible for the trading. 9. The Appellant’s evidence was going to be that his brother ran the company as a de-facto director, and he was prepared to give live evidence to that effect. He was confident that the Tribunal would find that the penalty should be attributable to his brother and thought nothing more of that. 10. However, he has only recently been informed that the appeals were struck out, that he remains liable for the debt and that his details will be published online. 11. His brother has recently contacted HMRC and admitted to, at times, impersonating the Appellant and this has led to the Appellant being kept in the dark. 12. This Application is very late, but, given the lack of knowledge on the part of the Appellant, due to his brother keeping him in the dark, this is justified. [Agent 3] were not instructed in the months leading to the Strike Out. 13. Further details will be provided by way of witness evidence to clearly support all the facts in this application.
The late appeal application
[72]On 14 March 2025, the Tribunal received the Second Appellant’s late appeal against the review decision issued to him on 20 April 2022, upholding the decision to issue a PLN in respect of the penalty issued to the First Appellant. This appeal was acknowledged and served on HMRC, and allocated to the Standard category.
HMRC’s opposition
[73]On 22 April 2025, HMRC opposed the reinstatement applications and the application to make a late appeal. In their Notice of Objection HMRC stated: It seems unlikely in the extreme that if [LA of Agent 3] was representing the [First Appellant] he would not have known that the [Second Appellant] was in no way engaging with it etc. The Respondents assert that if LA does not provide a witness statement (and the Appellant does not waive privilege) adverse inferences should be drawn.[74]The arguments in support, and in opposition, made by the parties are considered below.
Discussion and decision
[75]I start by consideration of the reinstatement applications, and then go on to consider the application for permission to make a late appeal.
Test to be applied when considering an application for reinstatement
[76]The appropriate way for the Tribunal to approach an application to reinstate an appeal that was struck out automatically for failure to comply with an Unless Order is set out in Chappell v The Pension Regulator [2019] UKUT 209 (TCC). In Chappell, the Upper Tribunal held that it was appropriate to follow the three stage approach set out in Martland v HMRC [2018] UKUT 178 (TCC) but with relevant revisions.[77]This approach has been re-approved by the Upper Tribunal in Breen v HMRC [2023] UKUT 00252 (TCC), and the appropriateness of the weighting at the third stage of Martland has been affirmed by the Court of Appeal in Medpro Healthcare Limited v HMRC [2026] EWCA Civ 14.[78]The three stage approach of Martland is:(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.[79]From paragraph 86 of Chappell onwards, the Upper Tribunal considered whether it was appropriate in a reinstatement application for the First-tier Tribunal to take into account the underlying merits of the appeal which the applicant sought to have reinstated. Judge Timothy Herrington stated: 86. In my view when considering a reinstatement application which is made following the making of an unless order, the Upper Tribunal should, consistently with what was said by the Supreme Court in Global Torch, generally take no account of the strength of the applicant’s case. It is helpful to set out in more detail what Lord Neuburger said at [29] of the judgment in that case: In my view, the strength of a party’s case on the ultimate merits of the proceedings is generally irrelevant when it comes to case management issues of the sort which were the subject of the decisions of Vos, Norris and Mann JJ in these proceedings. The one possible exception could be where a party has a case whose strength would entitle him to summary judgment….[80]As the Upper Tribunal then explained, with further reference to HRH Prince Addulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Limited [2014] UKSC 64 (“Global Torch”), the general principle is that the merits of a party’s case are not taken into account when a tribunal or court makes a case management decision. The exception, noted by Lord Neuberger, is where an applicant’s case is so weak that the other party would succeed in summary judgment. The Upper Tribunal considered the analogous test in the Upper Tribunal was an application to strike out on the basis that there was no prospect of the applicant’s case succeeding. In Chappell, the Upper Tribunal concluded: 94. It follows from what I have said that I should not take account of the merits of the case to the extent laid down by Proudman J in Pierhead Purchasing. In that context, I observe that Global Torch was decided after Pierhead Purchasing and as it is a judgment of the Supreme Court I am of course bound to follow it, again applying the principle that the tribunals should adopt by analogy the approach taken in the courts to matters of this kind.[81]The Upper Tribunal then concluded:99. In the light of the analysis set out above, in applying the overriding objective when considering the reinstatement application, I will follow the three stage approach set out at [44] of Martland as quoted above, adapted so as to take account of the fact that this is a reinstatement application rather than an application to make a late appeal. In that regard, at stage one, I will consider the seriousness and significance of the breach of the Unless Order, taking account also of the previous breaches of the Rules that led to the making of the Unless Order.100. …101. I shall only consider the merits of Mr Chappell’s reference to the extent that it appears that TPR's case has any feature such as those that I have described at [93] above.[82]Therefore, in considering the three applications for reinstatement, I must apply the three stage approach set out in Martland as varied by the extracts quoted above, but I should only take into account the substantive merits of each of the three appeals if I conclude that those merits are either very weak or very strong.
The merits of the three struck out appeals
[83]Looking first at whether the merits should be taken into account, in these applications, there is very little evidence on which I can make an assessment of the underlying merits. No lists of document or witness evidence had been filed by the appellants before the appeals were struck out. The grounds of appeal filed in 2022 referred to the onus being on HMRC to establish the connection to fraud and that, if HMRC established that, then the Second Appellant knew nothing of the arrangements as it was MU who was responsible for the trading. Those are not the most compelling of grounds but they are correct in stating that in an appeal against a penalty or a PLN, the onus is upon HMRC to establish that they have met the statutory requirements to impose the penalty and PLN – as recently reaffirmed in HMRC v Sintra Global [2025] EWCA Civ 1661. For the Second Appellant to succeed in his appeals against the PLNs, he would need to demonstrate that he was not in control of the three companies and that would require MU to give evidence. MU did not attend the hearing before me out of concerns for his own position so it is unclear that he would be willing to attend a substantive hearing where the same concerns would apply. Nevertheless, I conclude that the substantive merits of the three struck out appeals are not so weak that HMRC would succeed in an application to strike them out on the basis that there is no reasonable prospect of the appeals succeeding, and so I conclude that the merits of the appeals do not weigh either for or against reinstatement.
The seriousness and significance of the breaches
[84]Next, applying by analogy stage 1 of Martland, I look at the seriousness and significance of the breach of the Unless Orders, taking account also of the previous breaches which led to the making of the Unless Orders. In each of the three struck out appeals, the relevant appellant did not comply with the directions issued, did not respond to Tribunal correspondence and then did not comply with, or respond to, the Unless order issued by the Tribunal. Once LA of Agent 3 came off the record, there was a complete absence of engagement from the appellants. The breaches are serious and significant.[85]It is also relevant at this stage to take into account that neither the First Appellant nor the Second Appellant met the deadline for making a reinstatement application. Each reinstatement application was just over nine months late, a delay that is serious and significant when viewed against the 28 days permitted by the Tribunal Rules for such an application.
The reasons for the defaults
[86]The second stage of Martland is to consider the reasons for the defaults. There was significant disagreement between the parties about the reason given by the Second Appellant for why he had not made the reinstatement applications at any earlier date.[87]The essence of the Second Appellant’s case was that he was unaware of the HMRC investigation or the Tribunal proceedings until he received the 3 January 2025 letter informing him that his details would be published as a tax defaulter. The Second Appellant argues that he was impersonated at all relevant times by his brother, MU, that MU was responsible for the trading, that all HMRC’s correspondence went to MU and it was MU who made the pre 2025 telephone calls with HMRC that were said at the time to have been made by the Second Appellant. The Second Appellant argued that HMRC knew of his home address and that if HMRC had sent correspondence to him there then he would have had earlier awareness of the investigation and appeals, and could have co-operated with HMRC, complied with the Tribunal directions or applied for reinstatement at an earlier date.[88]HMRC do not accept that what the Second Appellant says about his lack of awareness is correct. HMRC rely, in particular, upon the Second Appellant’s interactions with the four agents that had been appointed to act on behalf of the First and/or Second Appellants since HMRC’s investigation began.[89]It is necessary for me to make further findings of fact in respect of this disputed point.[90]During the course of the HMRC investigation and the subsequent Tribunal proceedings, the First and Second Appellants engaged four different agents. The first of these agents (Agent 1) was already acting for the First Appellant when HMRC’s investigation began. Agent 2 then took over during the course of the investigation by HMRC and attended some telephone meetings. Agent 3 filed the appeals in 2022, was involved in the early stages of those proceedings and then filed the 2025 reinstatement application. Agent 4 was engaged solely for the purposes of seeking ADR in 2025. HMRC argue that it is not credible that any of these agents would have accepted the First Appellant as a client, or accepted instructions from a person claiming to be the Second Appellant without appropriate authorisation from the real Second Appellant. HMRC also make the point that it was open to the Second Appellant to disclose correspondence with these agents, to call these agents as witnesses, and to show that these agents were also deceived by MU.[91]The Second Appellant has disclosed one email from LA of Agent 3 dated 13 March 2025. However, that email itself refers to “3-4 additional emails” and also to the “email below”. (These additional emails were all sent to the Second Appellant as attachments to, or part of, LA’s 13 March 2025 email.) At the hearing, the Second Appellant said that these further emails were not disclosed as he had understood they would only be needed at the substantive hearing. However, I do not consider that the warning in HMRC’s Notice of Objection about drawing adverse inferences if full disclosure was not given, can have escaped the Second Appellant’s attention.[92]In this regard, I remind myself of the dictum of Mustill J. (as he then was) in Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corpn (No. 2) [1981] Comm LR 138 (at 139) regarding what is often described as “cherry-picking”: … where a person is deploying in court material which would otherwise be privileged, the opposite party and the court must have the opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.[93]I consider it (at least) possible that the communications between the Second Appellant and Agent 3 would be covered by litigation privilege. In choosing to disclose one email only, out of the (at least) five available, I conclude I am entitled to draw an adverse influence from the absence of those (at least) four other emails when considering the nature of the arrangements between Agent 3, the Second Appellant and MU in 2022.[94]The one email that has been disclosed was sent on 13 March 2025 to the Second Appellant. In this email LA states: There appears to be a problem brought about by the difficult communication between myself and [MU] in 2022. The personal penalty for [the First Appellant] was not appealed, as HMRC have now pointed out to me. That means that they will advertise as planned. I will send you 3-4 additional emails now that show how we interacted but there were large gaps in responses to us. See email below too and all relevant comments will be in yellow. There is now no hope of stopping the advertisement and no hope of stopping the related penalty to you being recovered. It is too late to appeal. I provided [MU] with all appeal documentation so that he could see what had been appealed and what hadn’t. Please digest the emails I will send. However, I am now to cancel the engagement we have, and you are no longer a client of this firm. I am also not able to deal with [MU] on your behalf given the serious issues this has caused up to this point.[95]The Second Appellant has argued that this email supports his contention that it was MU who was in communication with Agent 3 in 2022. I agree that this email gives the impression that MU led the communications with Agent 3 in 2022. However, I do not agree that this email shows that the Second Appellant was unaware in 2022 that there were Tribunal appeals or that this email shows that Agent 3 had been deceived in 2022 into thinking that MU was the Second Appellant.[96]The tone of this email is not that of an agent who has realised that he was the subject of a deception. The tone is that of an agent who has known all along of the Second Appellant’s existence, but who accepted (in 2022) that instructions would come from the Second Appellant via another person. If the Second Appellant had been wholly unaware of the 2022 proceedings, one might expect this lack of knowledge to be set out in the Second Appellant’s opening communication in 2025 to Agent 3, and for Agent 3 to be extremely concerned about how such a deception could have occurred. Despite no longer acting by the time that the appeals were struck out, Agent 3 would no doubt have had concerns about their own position. Such concerns would make it unlikely that Agent 3 would consider itself able to act for the Second Appellant in 2025, let alone draft a reinstatement application that is contrary to the case that the Second Appellant is now making. The disclosure of communications along these lines would have made a compelling case in support of the Second Appellant. However, LA’s email of 13 March 2025 is the only communication with Agent 3 that has been disclosed.[97]The Second Appellant’s contention that he had no awareness of the 2022 Tribunal proceedings is also contradicted by the version of events given by Agent 3 in the amended application for reinstatement. In this application LA states: Why were Appeals Struck Out 7. The Appellant was aware that personal penalties were issued and was extremely concerned as he had not met or spoken to HMRC and had not seen any HMRC correspondence. 8. The Appellant authorised [Agent 3] to act on his behalf for the Tribunal and was to attend as a witness. However, he allowed his brother ([MU]) to be the [Agent 3] contact throughout the appeal process given [MU] was responsible for the trading. 9. The Appellant’s evidence was going to be that his brother ran the company as a de-facto director, and he was prepared to give live evidence to that effect. He was confident that the Tribunal would find that the penalty should be attributable to his brother and thought nothing more of that.[98]The Second Appellant says that it is not true that he was aware of the 2022 appeals, that he did not authorise Agent 3, and that he does not know why LA would write this.[99]I have considered very carefully which version of events I consider is the more likely. I have taken into account that there were (at least) four other emails (referred to by LA in his 13 March 2025 email) and that the Second Appellant has chosen not to disclose any of these.[100]I have also taken into account that the Second Appellant has chosen not to call any of the former agents or MU to give evidence to support him. The Appellant said that MU was concerned about appearing before the Tribunal but no credible reason was given about why none of the former agents, in particular LA of Agent 3, had not been called.[101]The Second Appellant was asked about the onboarding procedures he went through in order to instruct Agent 3 in 2025. The Second Appellant said that he did not recall these checks as he was still in a blind panic having only recently made his discovery about the appeals, but that he definitely did not instruct Agent 3 in 2022. The Second Appellant said that a code sent by HMRC had been used for Agent 1, and that he was required to show his passport in order to instruct Agent 4 in late 2025.[102]I agree with HMRC that it is exceptionally unlikely that any of the four agents would have acted without assuring themselves of the identity of their client. I have concluded it is not credible that Agent 3 would have accepted instructions from MU about two companies of which the Second Appellant was then the sole director, or about the Second Appellant’s own tax affairs, without being satisfied – from the Second Appellant himself – that the Second Appellant had consented to that arrangement. I do not consider that the anti-money laundering checks that Agent 3 would inevitably have conducted would have enabled MU to deceive Agent 3 in the way that the Second Appellant says HMRC were deceived.[103]I have noted that the application for reinstatement filed by Agent 3 (and which the Second Appellant disputes) is also consistent with the emails LA of Agent 3 exchanged with HMRC in 2022 prior to filing the 2022 appeals. In those 2022 emails LA stated: The client does have very significant additional information/material to provide, in that he played no part in the transactions and that his brother controlled all aspects of trading.[104]If, as is obviously the case, Agent 3 was aware in 2022 that MU had been controlling “all aspects of trading” despite the Second Appellant being the sole director, then it is exceptionally unlikely that Agent 3 would agree to take instructions from MU on behalf of the Second Appellant, or for companies controlled by the Second Appellant, without being very sure – through thorough client onboarding and anti-money laundering procedures – that Agent 3 knew exactly who was being taken on as a client in 2022.[105]I have also borne in mind that – even if the Second Appellant thought that the other emails to or from Agent 3 were more relevant to the substantive proceedings – it was still open to him to call LA as a witness. Although the Second Appellant is unlikely to have been aware of this, LA has previously given oral evidence to this Tribunal about otherwise privileged communications between himself and a client, so there is no reason to suppose LA would not be willing to give evidence again.[106]Looking at the weight of evidence on this point, I find on the balance of probabilities that the Second Appellant was aware in 2022 that there were appeals to the Tribunal, made in his name, and those appeals were made on his instructions and with his consent.[107]Having made that finding, and so rejected the main argument made by the Second Appellant, I must still consider whether the remainder of what the Second Appellant says could constitute a good reason either for the breaches that resulting in the appeals being struck out, and/or for the delay in making the applications for reinstatement.[108]For the purpose of these applications I am prepared to accept that the Second Appellant is correct in saying that MU was the main protagonist in the interactions with HMRC, and also the main protagonist in giving instructions to Agent 3, and progressing the 2022 appeals once Agent 3 came off the record. However, that does not mean that the Second Appellant did not have any responsibilities, either as the First Appellant’s director or with respect to his own appeals. The Second Appellant chose to become a director of the First Appellant, and chose to allow MU to run the First Appellant, seemingly without making sufficient checks on how that was progressing. The Second Appellant told the Tribunal that he trusted MU to run the companies. While this trust might explain the lack of oversight until early 2022, I have found that the Second Appellant was aware of the 2022 appeals and so he was also aware from early 2022 that MU had chosen to impersonate him rather than involve him in HMRC’s investigation, and the Second Appellant was aware that leaving MU to manage matters alone had already gone badly wrong once. Despite that, it seems that the Second Appellant was content to allow MU to manage the Tribunal appeals, again without sufficient oversight. Following the principles in HMRC v Katib [2019] UKUT 0189, MU’s failures to progress the Tribunal appeals on the First and Second Appellants’ behalf are to be attributed to the First and Second Appellants unless the Second Appellant can demonstrate that he made reasonable efforts to ensure MU was acting appropriately on their behalf in these appeals.[109]No communications between the Second Appellant and MU have been disclosed. The Second Appellant has not argued that he checked frequently (or at all) with MU to understand how the appeals were progressing, or even checked on any other matters affecting companies where the Second Appellant was sole director (such as the August 2024 liquidation of The Jobline Limited).[110]I do not consider that the Second Appellant’s apparent willingness to leave matters in the hands of MU from March 2022 onwards provides the Second Appellant with a good excuse for the subsequent breaches of Tribunal directions, for the failures to comply with the Unless Order or for his delay in seeking reinstatement of the appeals.[111]The Second Appellant argued that if HMRC had sent written communications to his home address then MU’s deception would not have continued for as long as it did. I am satisfied that HMRC sent communications regarding the three companies to the registered addresses for those three companies, and that this was the correct last known address for the purposes of Section 98 VATA 1994. As sole director of the First Appellant, it was the Second Appellant’s responsibility to ensure that the First Appellant’s contact details for HMRC and Companies House (and also his own details on Companies House) were correct. HMRC made several attempts to obtain updated contact details for the First Appellant but, even when the 2022 appeals were filed, the registered address at Companies House for the First Appellant was still the Roding House address. It was the Roding House address that was given to the Tribunal as the First Appellant’s address. The Second Appellant – who I have found was aware of the 2022 appeals, and so aware by that stage of MU’s deception – had the opportunity when the appeals were filed in 2022 to provide Companies House, HMRC and the Tribunal with updated contact details to ensure postal communications were sent to him and he had oversight, but he did not do so. I do not consider that the fact that HMRC sent correspondence to the correct registered address for the First Appellant (and on two occasions to the Companies House registered address for the Second Appellant) provides the Second Appellant with a good excuse for not acting any earlier.[112]The Second Appellant also argued (in written post hearing submissions relating to the Human Rights Act 1998) that HMRC’s investigation was punitive, that the penalties are criminal in nature for the purposes of Article 6, and so the appeals must be reinstated in order that the correct perpetrator can be sanctioned. There is no evidence before me that HMRC’s investigation into the three companies was punitive, or in any way undertaken outside their statutory powers and duties, and I do not accept this submission. As HMRC have noted in their written response, it is not in dispute that the penalties are criminal in nature or that the procedural safeguards guaranteed by Article 6 of the European Convention on Human Rights apply, but that does not mean that there is a change to the test that the Tribunal should apply when considering reinstatement applications. The onus is still upon the First and Second Appellants to demonstrate that the appeals should be reinstated, and an important part of that is for such applicants to demonstrate that they have a good excuse for their breaches and their delay. I conclude that the Second Appellant has not demonstrated that in respect of these reinstatement applications.
Evaluating all the circumstances of the case
[113]The third stage of Martland is for me to conduct a balancing exercise which assesses the merits of the reasons given for the delay and considers the prejudice which would be caused to the parties.[114]I accept that there will be prejudice to the Second Appellant if his two appeals are not reinstated. While there is no evidence about the Second Appellant’s financial means, the two PLNs imposed upon him amount to approximately £161,000, and that is a considerable sum. The penalty imposed on the First Appellant amounts to £62,000. This is also a large amount but there are no accounts or other company financial records before me to assess whether this would greatly impact the First Appellant. The Second Appellant also states that it is likely that he would lose his job and suffer a loss to his professional reputation if his name is published as a person liable to pay a penalty linked to tax fraud. I accept that these are both possible consequences of the PLNs being confirmed, and that both are serious consequences. These are the same consequences that the Second Appellant would suffer if the appeals are reinstated but he is unsuccessful on appeal (whether because MU does not attend to give evidence or otherwise) but I accept that in the latter case the Second Appellant would feel he had at least done what he could to overturn the PLNs. If the appeals are not reinstated then the Second Appellant may consider he has lost his opportunity due to procedural reasons.[115]Looking at the converse position, there will be prejudice to HMRC if the appeals are reinstated. The investigation took place in 2021, and appeals were filed in 2022. When the appeals were struck out in 2024 without a timeous reinstatement application, HMRC were entitled to consider the matter closed, to close their files and to stand down potential witnesses. If the appeals are reinstated then HMRC will have to devote scarce public resources to matters they were entitled to consider final. If the appeals are reinstated then there will also be some prejudice to other Tribunal litigants, who have met Tribunal deadlines but who will suffer delay to their own appeals as Tribunal resources are dedicated to these reinstated appeals.[116]My starting point must be that the appeals should not be reinstated unless the First and Second Appellants have persuaded me that they should be – the onus is on the appellants. In weighing the competing factors, I 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”.[117]I have concluded that these appeals should not be reinstated. I accept that this will cause prejudice to the Second Appellant (and potentially the First Appellant) but I am not satisfied that this factor outweighs the other factors: prejudice to HMRC and other Tribunal appellants, a lack of any good reason for the breaches and delays, and the need for litigation to be conducted efficiently and at proportionate cost. The reason for the breaches and the delay ultimately amounted to the fact that the Second Appellant allowed others to take control of matters that were his own responsibility, and that he failed to take sufficient interest in matters that he should have prioritised. While it may be the case that the Second Appellant did not know of MU’s abuse of his trust prior to March 2022, after that date the Second Appellant was aware and he bears responsibility for the insufficient oversight he gave to Tribunal appeals that he knew had been made in his name and in the name of the First Appellant. Very regrettably for the Second Appellant, his own lack of involvement in 2022 is the primary cause of the consequences that flow from confirmation that the three struck out appeals remain struck out.
The Second appellant’s application to make a late appeal
[118]Having considered the reinstatement applications, I can now consider the Second Appellant’s application to make a late appeal.
Test to be applied when considering an application to make a late appeal
[119]As set out above, the correct test to apply is set out in Martland v HMRC [2018] UKUT 178 (TCC) (as set out above).
The length of the delay
[120]The Second Appellant’s late appeal against the third PLN was filed on 14 March 2025. The deadline for making a timeous appeal was 20 May 2022 (i.e. 30 days after 20 April 2022 date of the review decision). Therefore the appeal was made 1,030 days (or just under two years and ten months) late. In the context of a deadline of 30 days, that length of delay is exceptionally serious and significant.
The reasons for the delay
[121]In the Notice of Appeal form that was filed on 14 March 2025, the Second Appellant stated: I was the director in a nominal role only. My brother [MU] was the de facto director of the company. He, along with the tax advisor, [LA] were dealing with HMRC. I have not had any communication from HMRC regarding the the original VAT issue, the subsequent appeals or decisions. I was not aware of any of the business activities. No correspondence was sent to my home address regarding any of this. The first I heard of this was when the HMRC's publishing team sent me letters on the 3rd of January 2025, … saying that they were considering publishing my details as the person liable for penalties arising from transactions connected to VAT Fraud. I wrote to them to explain that I was not in communication with HMRC regarding any of this, and that is when they wrote back to me on the 26th of Febuary 2025, and I was made aware of the previous communications that had happened. I still don't know everything that has occurred.[122]I have found, above, that the Second Appellant was aware of the appeals that were filed in 2022, and that he instructed LA of Agent 3 in 2022. Therefore, I do not accept that the Second Appellant was unaware of matters from March 2022 onwards.[123]It is unclear why this appeal was not filed on time in April-May 2022. LA’s email of 13 March 2025 hints that MU had a copy of the relevant review decision but did not give appropriate instructions in relation to it. It may be that this review decision was subsequently overlooked by MU. Whatever the reason for it not being filed in time, it was the Second Appellant’s responsibility to have sufficient oversight of the Tribunal litigation so that he could check that an appeal had been filed against all the decisions he wanted to appeal. The Appellant was aware that a penalty had been issued to each of the three companies, and that two PLNs had been issued to him. All of those decisions were appealed in 2022. The Second Appellant could have predicted (with the assistance of Agent 3, if necessary) that a further PLN would, or could, be issued by HMRC. Checking that there was no further PLN review decision due, and – if there was – ensuring that an appeal was filed against it as soon as that review decision was received, should have been a priority for the Second Appellant in March 2022 when he became aware of gravity of his position.[124]The Second Appellant has argued that the PLN review decision was not sent to his home address. I have found it was sent to the Roding House address in April 2022. However, by March 2022, the Second Appellant had become aware that MU had not been open with him about how the companies were being operated and he was also aware that matters had become so serious that it was necessary to file appeals with the Tribunal. Agent 3 had been instructed and HMRC’s request for updated contact details had been conveyed to Agent 3. The Second Appellant had the opportunity to update the registered address for the First Appellant (and for himself) on Companies House, and he had the opportunity to contact HMRC to ensure that all future correspondence was sent to him directly. Unfortunately, the Second Appellant did not do that. I am satisfied that the review decision for the PLN, making the Second Appellant liable for the penalty imposed on the First Appellant, was correctly sent to the last known address for the purposes of Section 98 VATA 1994.[125]For the same reasons I have given above in respect of the reinstatement applications, I do not consider the Second Appellant’s willingness to allow MU to continue to take control of matters after March 2022, without applying adequate oversight, constitutes a good reason for the Second Appellant’s delay in filing this appeal.
Evaluating all the circumstances of the case
[126]The PLN is in the sum of £62,000. That is a large amount and I accept that there will be some prejudice to the Second Appellant if he is not given permission to make a late appeal, including the possible loss of his job and the consequences to his professional reputation referred to in respect of the reinstatement applications. However, if permission to make a late appeal is given, then there will be prejudice to HMRC who will be expected to respond to an appeal that has been filed almost 34 months late. There will also be prejudice to other Tribunal users as the Tribunal will be required to devote time and resources to managing and hearing this appeal, when that time could have been devoted to their appeals.[127]As with the reinstatement applications, the starting point is that permission to make a late appeal should not be given unless the Second Appellant persuades me that it should.[128]Taking into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected, I have concluded that permission to make a late appeal should not be given in this case. Although there will be prejudice to the Second Appellant, that factor is outweighed by the extremely serious and significant delay, the absence of a good reason for any of that delay and by the prejudice that would be caused to HMRC and the other Tribunal users if permission to make a late appeal was to be given. Unfortunately for the Second Appellant, as with the reinstatement applications, it is regrettable that the Second Appellant did not take appropriate control of matters in 2022 when given the opportunity to do so.
Outcome
[129]For the reasons set out above: - the First and Second Appellants’ applications for reinstatement are refused; and - the Second Appellant’s application to make a late appeal is refused.
Right to apply for permission to appeal
[130]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: 06 August 2026