The Commissioners for HMRC v Sharya UK LTD

For customs-debt notices, communication to a company is effective if a notice is delivered to its registered office or to an address which, objectively, the company has specified for customs purposes. In the absence of a statutory or contractual requirement, HMRC guidance does not itself impose a legally binding method for notifying a change of address.

Under sections 15C(1) and 16(1B)(a) of the Finance Act 1994, time runs from the date appearing on a document which operates to notify the decision, rather than its date of despatch. Permission for a late appeal requires particular weight to be given to efficient, proportionate litigation and compliance with statutory time limits. The existence of related appeals is ordinarily immaterial.

HMRC issued 40 C18 demand notices to Sharya UK Ltd for import VAT and customs duty arising after claimed inward-processing relief was not discharged. The notices were initially sent to the company's former Cavendish Road address. Some were later reissued to its Farringdon Street address.

The First-tier Tribunal held that 24 appeals were in time and permitted 16 further appeals to proceed late. HMRC appealed, challenging the conclusions on communication of the notices, the statutory dates from which review and appeal time limits ran, and the discretion to permit late appeals.

The central issues were when customs-debt notices had been communicated to the company and whether all of its appeals, lodged on 16 June 2017, should be admitted out of time.

1. Appeal allowed. The Upper Tribunal set aside the First-tier Tribunal decision and remade it by refusing permission for all 40 late appeals.

2. Neither the applicable EU customs legislation nor HMRC's published EORI guidance imposed a legally binding obligation on the company to notify a change of address through a specified HMRC team. Guidance did not acquire the force of law merely because it concerned a directly applicable Regulation. The company was, however, responsible for the accuracy of address information supplied in customs declarations.

3. A notice posted to a company's registered office is communicated for customs purposes by virtue of section 1139 of the Companies Act 2006. Communication may also occur at another address which the company has objectively specified for the relevant customs dealings. Personal receipt by a director or employee is unnecessary. The EORI application made Cavendish Road the notified customs address. The VAT-registration application alone did not change that address for customs purposes.

4. However, the company's clear letter of 16 May 2016 to HMRC's customs unit, received on 19 May, notified Farringdon Street as its customs address. From then, HMRC could not communicate customs documents by sending them to Cavendish Road. Fifteen earlier notices were validly communicated there; seven later returned notices were validly communicated when reissued to Farringdon Street by 30 June 2016; and the remaining 18 were communicated when received there on 2 November 2016.

5. For both a review under section 15C(1) and an appeal under section 16(1B)(a) of the Finance Act 1994, the relevant time limit ran from the date appearing on a document which notified the decision. It did not run from despatch. The review request of 22 November 2016 was therefore late for every demand.

6. The First-tier Tribunal erred in its late-appeal discretion. It failed to give particular importance to efficient and proportionate litigation and observance of statutory time limits. It also treated the ability to pursue other appeals as virtually decisive, although related appeals are normally of limited or no relevance. The Company’s delays, including the further delay after November 2016, were serious and significant. Permission was refused.

• Upper Tribunal (Tax and Chancery Chamber): HMRC's appeal was allowed. The First-tier Tribunal decision was set aside and remade so as to refuse permission for all 40 late appeals: [2019] UKUT 143 (TCC).
• First-tier Tribunal (Tax Chamber): In a decision released on 12 February 2018, it held 24 appeals in time and permitted 16 further appeals to be brought late. No citation is stated in the judgment.