Rose
| Jurisdiction | UK Non-devolved |
| Judgment Date | 10 May 2019 |
| Neutral Citation | [2019] UKFTT 308 (TC) |
| Date | 10 May 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 308 (TC)
Judge Jeanette Zaman
Colin Anderson, of Colin Anderson Accountancy, appeared for the appellant
Sadia Shakeel, litigator of HM Revenue and Customs' Solicitor's Office, appeared for the respondents
Procedure – Income tax – Whether permission should be given for late notification of appeals – Decision of the Upper Tribunal in Martland v R & C Commrs [2018] BTC 525 considered – Permission refused.
[1] Mr Rose applied for permission to make late appeals against amendments to his self-assessment tax returns for the tax years 2015–2016 and 2016–2017 as further set out in the Relevant Facts below.
[2] HMRC object to the application on the basis that Mr Rose has failed to prosecute his appeal with reasonable diligence as it was made 245 days out of time.
[3] The facts found in paragraphs 4 to 18 below are below are based on the bundle of documents prepared by HMRC. Mr Rose did not attend the hearing to give evidence.
[4] Mr Rose is a self-employed bricklayer. He completed his own self-assessment tax returns for the tax years in issue, and dealt with the correspondence with HMRC which is referred to below.
[5] HMRC wrote to Mr Rose on 17 May 2017 in relation to the tax year 2015–2016 informing him that the information he had provided (in a letter stated to have been received on 24 March 2017) was not all that HMRC needed to agree the figures in his tax return and setting out further information needed.
[6] HMRC wrote to Mr Rose on 14 July 2017 in relation to the tax year 2015–2016 informing him that based on the information he had provided they believed the amount of expenses claimed was too high, and setting out the amendments proposed to be made.
[7] Also on 14 July 2017, HMRC wrote to Mr Rose informing him that they were checking his tax return for the tax year 2016–2017.
[8] HMRC issued a closure notice and amendments to Mr Rose's self-assessment on 21 August 2017 under s28A(1) and (2) Taxes Management Act 1970 (“TMA 1970”) for the tax year 2015–2016. The closure notice states that if the taxpayer wants to appeal he should write to HMRC by 20 September 2017. That closure notice also stated that HMRC would be charging a penalty for the error in the tax return. Mr Rose has not appealed against that penalty and is not seeking permission to make a late appeal in respect thereof.
[9] HMRC wrote to Mr Rose on 1 November 2017 in relation to the tax year 2016–2017 informing him that the information he had given them (in a letter dated 10 October 2017) was not enough for HMRC to agree the figures in his tax return. That letter goes on to set out the additional information required.
[10] HMRC wrote to Mr Rose on 30 November 2017 in relation to the tax year 2016–2017 informing him that based on the information he had provided they believed the amount of expenses claimed was too high, and setting out the amendments proposed to be made.
[11] HMRC issued a closure notice and amendments to Mr Rose's self-assessment on 11 December 2017 under s28A(1) and (2) TMA 1970 for the tax year 2016–2017. The closure notice states that if the taxpayer wants to appeal he should write to HMRC by 10 January 2018.
[12] The bundles of documents provided by HMRC did not contain copies of any of the correspondence from Mr Rose to HMRC in respect of the enquiries into his self-assessments for the tax years 2015–2016 or 2016–2017, but HMRC's letters do refer to letters and information provided by Mr Rose during that time.
[13] Mr Anderson wrote to the Tribunal on 13 September 2018 enclosing:
- Form 239 dated 3 September 2018 authorising Mr Anderson to act on Mr Rose's behalf in this appeal; and
- Notice of Appeal to the Tribunal dated 12 September 2018 together with supporting documentation.
[14] The Notice of Appeal includes the following answers to the questions therein:
- Did you appeal the original decision to HMRC? No. (The guidance notes next to this question state that For direct tax or information notices, you must appeal to HMRC before you can appeal to the tax tribunal.)
- What happened after you appealed to HMRC? My appeal to HMRC was late. I am applying to be allowed to make a late appeal to HMRC.
- Did you have a review of the original decision? Yes.
- Are you in time to appeal to the tax tribunal? No. I am late.
[15] The bundle did not contain any other reference to a review of the original decision (either a request or a letter setting out the outcome of the review) and at the hearing Mr Anderson accepted that this was an error in the completion of the form and no review had been requested.
[16] The Notice of Appeal explained that that the appeal was notified late as:
On advice of my peers I appointed an accountant to deal with my tax affairs originally to do my 2018 and future tax returns.
On further discussion about my tax affairs my newly appointed accountant suggested that some of the findings by HMRC were possible to challenge.
Since that meeting we have been putting together our case for appeal, some of it being hampered by the fact that some of the core records originally submitted to HMRC during the enquiries had not been returned.
[17] Mr Rose states in the Notice of Appeal that the outcome sought is that his suggested revised computations for the tax years 2015–2016 and 2016–2017 (which were enclosed therewith) be accepted and his tax calculations be adjusted accordingly. The note prepared by Mr Anderson which accompanies these suggested revisions contains a brief explanation of the challenges made to HMRC's disallowances, and also states:
My client provided HMRC with a lot of paperwork and, after requesting it back on the closure of the enquiry he has only received a minimal amount back. Some only in the last few weeks. It has therefore been impossible to verify the enquiries team findings and therefore the following revised figures for the two years are based on the accounts prepared in 2018 from my client's books and records. The 2018 tax return has been filed with HMRC …
My client is a lay person who thought, at the time, that he would be able to deal with, firstly, preparing his own tax return to the best of his ability and, secondly, the enquiry into his returns … in hindsight he realises he should have used a representative.
[18] On 30 October 2018 HMRC notified the Tribunal that they object to the application for permission to lodge the appeal in a Notice of Respondents' Objection to Appellant's Application for permission to make a late appeal (“HMRC's Objection Notice”). HMRC's Objection Notice refers to s49 TMA 1970, noting that HMRC “may agree to accept an appeal” which has been made late if it is made in writing, if the appellant has a reasonable excuse for making the appeal out of time and has submitted their appeal to HMRC as soon as the excuse for the lateness has ceased. HMRC...
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