Richard Ellison v The Commissioners for HMRC [2026] UKFTT 913 (TC)

[2026] UKFTT 00913 (TC)

Case No TC 09923

FIRST-TIER TRIBUNAL

TAX CHAMBER

Hearing Heard on: 10 June 2026

Date Judgment date: 18 June 2026

Application decided on the papers

Appeal reference: TC/2025/03201

Income tax – application for reinstatement of appeals withdrawn by the Appellant in 2018 – application refused

Before

TRIBUNAL JUDGE MATTHEW DONMALL

Between

RICHARD ELLISONAppellant

THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondent

DECISION

Introduction

[1]The Appellant submitted the present appeal on 10 August 2025. He has subsequently clarified that he seeks to challenge VAT surcharges for periods from 02/17 to 11/20 (the VAT Surcharges) and income tax assessments for 2011/12 to 2014/15 (the 2012-2015 Income Tax Assessments). The Appellant accepts that he had already challenged the 2012-2015 Income Tax Assessments within former appeals TC/2017/03786 and/or TC/2017/06240 (the 2017 Appeals). The Appellant had withdrawn from the 2017 Appeals, and the Tribunal acknowledged this in March 2018. He now applies for the reinstatement of the 2017 Appeals insofar as they related to the 2012-2015 Income Tax Assessments in order to pursue that part of the present appeal.

[2]For the reasons set out below, this application for reinstatement is refused.

Background

[3]On 10 August 2025, the Appellant submitted his notice of appeal in the present appeal. The desired outcome was stated as: Mr. Ellison asks the Tribunal to cancel all remaining 2011/12–2014/15 Self-Assessment and VAT penalties and interest, citing overstated assessments (already paid back), disability, and adviser negligence, and to reclassify his behaviour as “careless.” This would let him continue running a compliant, tax-paying business free from disproportionate historic penalties.

[4]Attached to the appeal was a letter dated 21 October 2016 from HMRC, which set out the conclusion that a total of £219,015.63 was due over years 2011/12 to 2014/15, of which income tax was £202,116.95 and NICs were £16,898.68.

[5]The grounds of appeal set out five grounds:(1) A reasonable excuse for failure for the defaults such that there should be no penalties, that excuse being that he has dyslexia and was badly let down by the professionals he employed.

(2) The assessments for income 2011-2015 were “grossly inflated”.

(3) The VAT surcharges and interest arising from the period 2011-2015 were disproportionate and the Appellant also had a reasonable excuse for the defaults.

(4) HMRC’s original classification of the Appellant’s compliance behaviour as “deliberate with concealment” for the purposes of penalties was wrong, at the highest it was carelessness.

(5) The Appellant asks the Tribunal to consider the serious ﬁnancial hardship and wider public interest implications of enforcing these penalties now.

[6]The notice of appeal put “I am not sure” about whether it was in time, supplemented by a document on the timing of the appeal. That document stated “The delay in submitting this appeal is the direct result of exceptional circumstances outside the appellant’s control, supported by evidence already disclosed to HMRC and the Tribunal.” It concluded: In summary, the lateness is not due to neglect but to a combination of protected disability, sustained adviser misconduct, HMRC’s own administrative delays, pandemic-related hardship, and the need to prioritise current tax compliance to preserve 86 jobs. Since late 2021, there have been zero late ﬁlings on current liabilities, and every reasonable step has been taken to resolve historic debts.

[7]HMRC responded on 24 November 2025 by an application for further and better particulars (FBP Application) by way of amended grounds of appeal, in particular: b) The amended grounds should list the precise decisions of the Respondents which they disagree with; c) The amended grounds of appeal should ensure that the Appellant’s legal and factual grounds relied upon in support of their appeal are clear in respect of each decision. The Appellant should indicate why they believe the facts or legal reasoning relied upon by the Respondents are incorrect.

[8]Within the FBP Application, HMRC noted that on 10 November 2025, Late Payment Penalties and Late Filing Penalties (and associated statutory interest) for the 2013/14, 2014/15, 2016/17, 2017/18 & 2019/20 tax years were cancelled, and that statutory interest was not something that itself can be appealed. Appendix A set out particulars of debt to HMRC’s bankruptcy petition (undated but later explained in HMRC’s Objection discussed below as being 23 January 2025), running to £297,974.85 in debt, the majority of which was comprised of VAT liabilities from 08/2018 to 05/22.

[9]On 27 January 2026, the Appellant provided a response to the FBP Application (FBP Response). The main text of the FBP Response set out the appeals as follows:(1) “Appeal 1” relates to the 2012-2015 Income Tax Assessments. The Appellant contends that the income valuations for 2011/12 to 2014/15 were disproportionate and implausible. The argument in essence is that income tax assessment proceeded on the basis that all additional turnover was profit.

(2) “Appeal 2” is in effect against the VAT Surcharges (as clarified in appendix B, and in the subsequent response of 5 May 2026 noted below).

[10]On 2 April 2026, HMRC submitted a notice of objection to late appeal application (HMRC’s Objection). Within that:(1) As regards “Appeal 1” against the 2012-2015 Income Tax Assessments, HMRC noted that the Appellant had previously made two appeals to the Tribunal, TC/2017/03786 against Closure Notice & Discovery Assessments, and TC/2017/06240 in regards to earlier VAT assessments, i.e. the 2017 Appeals. In the chronology section at paragraph 44, HMRC noted that on 5 March 2018, the Tribunal informed HMRC that the Appellant had withdrawn both the 2017 Appeals. HMRC contend that the Appellant withdrew TC/2017/03786, and that creates a deemed settlement pursuant to section 54(4) of the Taxes Management Act 1970 (TMA 1970). In consequence HMRC contend that as regards Appeal 1, the Appellant cannot in substance be making a late appeal application, because the matters were already the subject of a prior appeal, nor can the Appellant’s prior appeal be reinstated.

(2) As regards “Appeal 2” against the VAT Surcharges, HMRC assert their understanding that the decisions in relation to the VAT assessments per se were not under appeal, only the default surcharges (‘the Surcharges’). HMRC accepted that those Surcharges were not the subject of a prior appeal but objected to a late appeal being allowed in respect of them.

[11]On 20 April 2026, the Tribunal issued directions (the April Directions). In the preamble, the Tribunal senior tax specialist caseworker noted “Having checked our records I can confirm that the appeal TC/2017/03786 (Direct Tax) was recorded as an appeal against decisions dated 19 October 2016 & 21 October 2016- amounts listed £219,204.63, £153,443.23 and TC/2017/06240 (the indirect tax appeal) – VAT £116,225 and £94,310 Penalty. These appeals were withdrawn by the appellant, and the files have been destroyed in accordance with our destruction policy.” The directions were given as follows: 1. Not later than 14 days of the date of this email appellant is directed to write to the Tribunal and HMRC and:a. If the appellant intention is to continue with the appeals against the decisions previously appealed under TC/2017/03786 and TC/2017/06240 then the correct procedure is for them to make an application for the appeals to be reinstated. Such application must be made with reasons and within the above set time limit.

b. Provide a comprehensive list of the decisions this appeal is intended to be against, other than the ones included in TC/2017/03786 and TC/2017/06240. Please note that there is no right of appeal against the accumulated interest.

c. Provide their representations to the respondents’ application dated 2 April 2026. 2. Respondents may, not later than 14 days after receipt of the appellant’s compliance with Direction 1 provide the Tribunal and the appellant with their further response (if any).

[12]On 5 May 2026, the Appellant provided his response pursuant to the April Directions, in which:(1) The Appellant applied to reinstate the appeals TC/2017/03786 and/or TC/2017/06240. It stated in the chronology section that these appeals were recorded by the Tribunal as withdrawn on 5 March 2018.

(2) The Appellant identified the VAT default surcharge decisions for fifteen periods from 02/17 at the earliest to 11/20 at the latest as being “the decisions challenged which were not part of the withdrawn 2017 appeals”.

(3) The Appellant made representations on HMRC’s Objection.

[13]On 19 May 2026, HMRC wrote to state that they would not be making an additional response to the Appellant’s May Representations. HMRC stated that in their view, the reinstatement application should be dealt with on the papers, and that the decision relation to the late appeal application could then proceed to be decided separately, by way of a hearing.

Discussion

[14]The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 rule 17 provide as follows: 17. —(1) Subject to any provision in an enactment relating to withdrawal or settlement of particular proceedings, a party may give notice to the Tribunal of the withdrawal of the case made by it in the Tribunal proceedings, or any part of that case—(a) by sending or delivering to the Tribunal a written notice of withdrawal; or

(b) orally at a hearing. (2) The Tribunal must notify each party in writing of its receipt of a withdrawal under this rule. (3) A party who has withdrawn their case may apply to the Tribunal for the case to be reinstated. (4) An application under paragraph (3) must be made in writing and be received by the Tribunal within 28 days after— (a) the date that the Tribunal received the notice under paragraph (1)(a); or (b) the date of the hearing at which the case was withdrawn orally under paragraph (1)(b).

[15]Rule 17(3) does allow a party who has withdrawn their case to apply to the Tribunal for the case to be reinstated. However, under rule 17(4) such an application for reinstatement “must be made in writing and be received by the Tribunal within 28 days after (a) the date that the Tribunal has received the notice under paragraph (1)(a)”.

[16]In the present case, of the 2017 Appeals, both the Tribunal’s records as recorded in the April Directions and HMRC’s Objection indicate that it was TC/2017/03786 that related to direct tax. It is therefore appeal TC/2017/03786 to which his reinstatement application in substance relates.

[17]The Appellant accepts, consistent with HMRC’s contention and the Tribunal’s own record, that he withdrew TC/2017/03786. There is no suggestion that this happened orally at a hearing, and so I find that the withdrawals must have been by written notice to the Tribunal.

[18]The Appellant accepts that the Tribunal recorded the 2017 Appeals as withdrawn and the file to be closed on 5 March 2018. This is the same date as stated in HMRC’s Objection at paragraph 44. I therefore find that these withdrawals were notified by the Tribunal as per rule 17(2) on 5 March 2018.

[19]It follows therefore that each of the 2017 Appeals were withdrawn by the Appellant by written notice on or earlier than 5 March 2018.

[20]That being so, under rule 17(4), any application for reinstatement had to have been made within 28 days of that withdrawal. So at the latest, 2 April 2018. That makes the present application for reinstatement of 5 May 2026 over 8 years later.

[21]Under Rule 5, the Tribunal does have the power to extend the rule 17(4) time limit, but it cannot extend time in all circumstances.

[22]Tribunal Rule 5 provides: 5. — Case management powers(1) Subject to the provisions of the 2007 Act and any other enactment, the Tribunal may regulate its own procedure.

(2) The Tribunal may give a direction in relation to the conduct or disposal of proceedings at any time, including a direction amending, suspending or setting aside an earlier direction.

(3) In particular, and without restricting the general powers in paragraphs (1) and (2), the Tribunal may by direction— (a) extend or shorten the time for complying with any rule, practice direction or direction, unless such extension or shortening would conflict with a provision of another enactment setting down a time limit;

[23]Therefore, provided there is no other enactment which specifies a conflicting time limit, the Tribunal has the power to exercise its discretion about whether to grant an extension of time.

[24]However, there is such a conflict. Section 54 TMA 1970 makes provision for what happens to direct tax appeals that are settled by agreement or withdrawn by an appellant. Section 54 TMA 1970 provides: 54. — Settling of appeals by agreement.(1) Subject to the provisions of this section, where a person gives notice of appeal and, before the appeal is determined by the tribunal, the inspector or other proper officer of the Crown and the appellant come to an agreement, whether in writing or otherwise, that the assessment or decision under appeal should be treated as upheld without variation, or as varied in a particular manner or as discharged or cancelled, the like consequences shall ensue for all purposes as would have ensued if, at the time when the agreement was come to, the tribunal had determined the appeal and had upheld the assessment or decision without variation, had varied it in that manner or had discharged or cancelled it, as the case may be.

(2) Subsection (1) of this section shall not apply where, within thirty days from the date when the agreement was come to, the appellant gives notice in writing to the inspector or other proper officer of the Crown that he desires to repudiate or resile from the agreement. … (4) Where— (a) a person who has given a notice of appeal notifies the inspector or other proper officer of the Crown, whether orally or in writing, that he desires not to proceed with the appeal; and (b) thirty days have elapsed since the giving of the notification without the inspector or other proper officer giving to the appellant notice in writing indicating that he is unwilling that the appeal should be treated as withdrawn, the preceding provisions of this section shall have effect as if, at the date of the appellant's notification, the appellant and the inspector or other proper officer had come to an agreement, orally or in writing, as the case may be, that the assessment or decision under appeal should be upheld without variation. (5) The references in this section to an agreement being come to with an appellant and the giving of notice or notification to or by an appellant include references to an agreement being come to with, and the giving of notice or notification to or by, a person acting on behalf of the appellant in relation to the appeal.

[25]As explained in Hosie v HMRC

[2025] UKFTT 00327 (TCC)

by Judge Bailey at [43]: [T]he effect of Sub-section 54(4) TMA 1970 is that where an appellant notifies HMRC that he is withdrawing his appeal from the Tribunal, and 30 days then pass without an HMRC officer indicating that he or she is unwilling for that appeal to be withdrawn, then the withdrawal is treated as if the parties had reached an agreement (and that agreement is that the decision under appeal should be upheld without variation). That deemed agreement is treated as if it was a decision of the Tribunal.

[26]As Judge Bailey in Hosie held at [46], the Tribunal cannot grant an extension under rule 5 that would conflict with s.54 TMA.

[27]Therefore in the Appellant’s case, even allowing the latest date for his notice of withdrawal in respect of TC/2017/03786 as 5 March 2018, given there had been no objection by 4 April 2018 the withdrawal then became deemed to be an agreement that the decision under appeal should be upheld without variation. That deemed agreement is treated as if it was a decision of the Tribunal.

[28]It is therefore not legally possible for the Tribunal to reinstate TC/2017/03786 which is deemed already to have decided by the Tribunal. That being the case, the Tribunal does not have jurisdiction in relation to the 2012-2015 Income Tax Assessments, as these were the subject of the TC/2017/03786 appeal and deemed already decided.

Conclusion

[29]For these reasons, the Appellant’s application for reinstatement is refused, and that part of the present appeal relating to the 2012-2015 Income Tax Assessments is struck out.

[30]As regards the other part of the present appeal, that against the VAT Surcharges, the Appellant has applied for permission to bring a late appeal, to which HMRC has objected. That application is to be decided by way of a hearing in due course.

Right to apply for permission to appeal

[31]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: 18 June 2026