Robert Huitson v The Commissioners for HMRC

A decision may be set aside under rule 43 of the Tribunal Procedure (Upper Tribunal) Rules 2008 only where a prescribed condition is met and setting it aside is in the interests of justice. A procedural failure, including failure to serve material submissions, will not justify that remedy where further submissions would not have altered the result.

An extension of time remains fact-sensitive. The absence of a good explanation for substantial delay and prejudice arising from loss of finality may justify refusal. Permission to appeal requires a real prospect of success and the statutory gateway of an important point of principle or practice, or another compelling reason.

The First-tier Tribunal dismissed Mr Huitson’s tax appeal in September 2015 but granted him permission to appeal to the Upper Tribunal. No notice of appeal was provided within the applicable time limit. In August 2016, the Upper Tribunal refused an extension of time.

Mr Huitson then applied to set aside that extension-of-time decision. He relied principally on HMRC’s failure to provide him with its written response before the decision was made, the absence of his proposed appeal grounds from the papers, and an alleged procedural irregularity. Alternatively, he sought permission to appeal to the Court of Appeal.

The central issues were whether rule 43 permitted and justified setting aside the earlier decision, and whether the proposed appeal met the statutory permission threshold.

1. The application to set aside was refused and permission to appeal was refused. Rule 43 of the Tribunal Procedure (Upper Tribunal) Rules 2008 creates no general interests-of-justice power to reopen a decision. The Tribunal may act only where the interests of justice require it and a condition in rule 43(2) is satisfied.

2. HMRC’s failure to copy its letter and formal response to Mr Huitson or his advisers was regrettable. It was inconsistent with the duty under rule 2(4) to help further the overriding objective and cooperate with the Tribunal. However, it did not justify setting aside the extension-of-time decision. The Tribunal had already stated that the application would be decided on the papers unless a hearing was requested. Further submissions about the corrected number of affected taxpayers would not have changed the conclusion that the number and the work involved were significant.

3. The absence of the proposed grounds of appeal from the papers was also immaterial. The Tribunal had assumed for the extension application that Mr Huitson had a good case. The significance of the underlying litigation was otherwise apparent. There was no good reason or explanation for the delay, and granting an extension would prejudice HMRC and affected taxpayers.

4. R (Hysaj) v Home Secretary [2015] 1 WLR 2472 did not establish a procedural irregularity. It confirmed that the principles in Denton v TH White Ltd (Practice Note) [2014] 1 WLR 3926 apply to extensions of time for appeals, but each application turns on its own facts. The facts were not sufficiently close to assist Mr Huitson.

5. Review under rule 45(1) was unavailable because no relevant legislative provision or binding authority had been overlooked, and no later binding decision could have materially affected the earlier decision. The proposed appeal disclosed no arguable error of law, no important point of principle or practice, and no other compelling reason for an appeal. HMRC’s application for costs was refused because its failure to serve its response had given rise to the set-aside application and hearing.

• Upper Tribunal (Tax and Chancery Chamber): refused to set aside its August 2016 decision refusing an extension of time to provide a notice of appeal, and refused permission to appeal to the Court of Appeal.

• Upper Tribunal (Tax and Chancery Chamber): in August 2016, refused an extension of time for a notice of appeal from the First-tier Tribunal.

• First-tier Tribunal: dismissed the substantive tax appeal in September 2015 and subsequently granted permission to appeal on four grounds.