Woodpecker Ltd v HMRC

Transmission of a case stated within the statutory period establishes the High Court’s jurisdiction to entertain a tax appeal. It does not displace the procedural requirements governing appeals in the High Court. An appellant must file and serve an appellant’s notice, and an out-of-time notice must include an application for an extension of time. Extensions are exceptional. The court must weigh finality, promptness, compliance, the explanation for default, and prejudice to the parties. Serious delay, failure to apply promptly, non-compliance with the procedural rules and prejudice to the respondent may justify refusal, even where refusal prevents exercise of a statutory right of appeal.

Woodpecker Ltd appealed against a decision of the General Commissioners concerning corporation tax deductions for payments made to trustees of an employee share ownership plan. The Commissioners found that the payments were incurred wholly and exclusively for the company’s trade, but disallowed them as relevant emoluments.

Woodpecker requested a case stated and transmitted it to the High Court without an appellant’s notice and without the correct fee. After HMRC challenged the procedural position, Woodpecker eventually filed an appellant’s notice and sought an extension of time. The issues were whether an appellant’s notice was required and, if so, whether time should be extended.

1. Jurisdiction and procedure. Regulation 22 of the General Commissioners’ (Jurisdiction and Procedure) Regulations 1994 concerns the creation and timely transmission of a case stated. Transmission within 30 days is a jurisdictional requirement. Once the High Court is seized of the appeal, however, CPR Part 52 and the applicable Practice Direction govern its conduct.
2. An appellant’s notice is therefore required in an appeal by way of case stated. The statutory and regulatory provisions do not create a self-contained procedure excluding CPR Part 52. The requirement to file the case stated within 30 days and the procedural requirement to file an appellant’s notice within 14 days of receiving it are capable of reconciliation. If the notice is out of time, it must include an application for an extension and the reasons for delay.
3. The court applied the approach in Sayers v Clarke Walker [2002] EWCA Civ 645 and the guidance in Smith v Brough [2004] EWCA Civ 261. Finality is a fundamental principle. An extension of time for appealing is exceptional and reserved for rare and limited cases in which the facts justifying relief are strictly established.
4. The relevant considerations included the interests of justice, the length and seriousness of the delay, promptness of the application, whether the default was intentional, general compliance, responsibility for the default, and the effect of granting or refusing relief. Woodpecker’s delay was serious. It did not apply promptly after HMRC clearly identified the procedural defect, and it failed to comply with the requirements for an extension application.
5. The denial of a statutory right of appeal was not decisive, since that consequence follows whenever an extension is refused. HMRC also faced prejudice in managing its litigation and tax collection and in seeking remission to the Commissioners on an inadequately stated issue. The court refused to extend time and dismissed the notice of appeal.

The judgment does not state a prior appellate decision. It concerns an appeal from the General Commissioners and an application to extend time for filing the appellant’s notice.