EXCLUSIVE PROMOTIONS LIMITED v THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS [2023] UKUT 00269 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | Mrs Justice Bacon,Judge Greg Sinfield |
| Subject Matter | 9 November 2023 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 09 November 2023 |
Neutral Citation: [2023] UKUT 00269 (TCC)
Case Number: UT/2022/000068
UPPER TRIBUNAL
(Tax and Chancery Chamber) Rolls Building
Fetter Lane
London EC4A 1NL
INCOME TAX AND NATIONAL INSURANCE – APNs – penalties – appeal dismissed
Heard on: 11 and 12 July 2023
Judgment date: 9 November 2023
Before
MRS JUSTICE BACON
JUDGE GREG SINFIELD
Between
EXCLUSIVE PROMOTIONS LIMITED
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Conrad McDonnell and Samuel Brodsky, counsel, instructed by
Reynolds Porter Chamberlain LLP
For the Respondents: John Brinsmead-Stockham KC, instructed by the General Counsel and
Solicitor to His Majesty’s Revenue and Customs
1
DECISION
INTRODUCTION
1. In 2016, the Respondents (HMRC) issued two Accelerated Payment Notices (APNs) to
Exclusive Promotions Limited (EPL), under Chapter 3 of Part 4 of the Finance Act 2014 (FA
2014) and Schedule 2 to the National Insurance Contributions Act 2015.
1
The effect of the
APNs was that EPL became liable to pay the disputed tax and National Insurance contributions
(NICs), even though there was an appeal by EPL against the tax and NIC determinations which
had yet to be determined.
2. EPL challenged the APNs by issuing a judicial review claim in the High Court. It did not
pay the tax and NICs under the APNs by the due date and, in 2017 and 2018, HMRC imposed
six penalties on EPL for its failure to pay on time. Two of the penalties were subsequently
withdrawn leaving a liability to pay a total of £6,339.52.
3. EPL appealed the penalties, first to HMRC and then, when HMRC confirmed the
penalties, to the First-tier Tribunal (the FTT). In the FTT, EPL’s appeal was heard with that of
another person, Mr Mark Fox. During the FTT hearing, HMRC withdrew some of their
decisions which left Mr Fox facing a liability in respect of two penalties of less than £200 in
total. Although the FTT dismissed Mr Fox’s appeal in relation to the two penalties, he has,
understandably, decided not to join EPL in an appeal to the Upper Tribunal (UT).
4. Before the FTT, EPL challenged the penalties on three grounds, namely that:
(1) the time limit for paying the APNs had not started to run because HMRC had never
made a determination as required by s. 222 FA 2014 (s. 222);
(2) a genuine belief by a director of EPL that the judicial review would succeed,
because the APNs contained a procedural error by failing to consider EPL’s
representations about the decision-making process of the designated HMRC officer, was
a reasonable excuse for the late payment of the tax and NICs; and/or
(3) the interim relief agreed between EPL and HMRC provided a reasonable excuse
for the late payment even after a judicial review challenge to APNs by other claimants
had failed.
5. In a decision released on 1 March 2022, [2022] UKFTT 103 (TC) (the Decision), the
FTT decided against EPL on all three grounds and dismissed its appeal. In summary, the FTT
decided that:
(1) HMRC did make a determination, albeit a flawed one, in their letter of 22 February
2017 and so the time limit began to run from that date;
(2) a genuine belief that a judicial review would succeed cannot form an objectively
reasonable excuse for the purposes of an APN penalty, and in any event the director of
EPL did not have any understanding of the merits of the judicial review claim, let alone
the specific designated officer points; and
1
It is common ground between the parties that the relevant provisions of FA 2014 and the National Insurance
Contributions Act 2015 are materially the same. This decision therefore only refers to the provisions of FA 2014.
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