Charles Horder v The Commissioners for HMRC

An application to appeal out of time requires consideration of the seriousness of the delay, the reason for it, and all the circumstances. The applicant’s prospects of success are relevant, but even a strong substantive case does not ordinarily require permission to be granted. Those prospects must be balanced against the importance of respecting statutory time limits and other countervailing factors. The prospect that refusal may contribute to criminal sanctions is also a factor in the balance and does not automatically require an extension. Decisions about how to hear the application are case-management decisions for the First-tier Tribunal.

Mr Horder appealed against the First-tier Tribunal’s refusal to permit a late appeal against a notice of requirement to provide security for PAYE and NICs. The notice made him jointly and severally liable with Quadragina Ltd. His appeal was lodged more than 14 months after the statutory 30-day period.

The FTT heard evidence and submissions on both the late-appeal application and the substantive challenge. It considered the substantive appeal very likely to succeed but refused permission because the delay was serious, lacked a good explanation, and occurred while the company continued trading with HMRC exposed to unpaid liabilities. The Upper Tribunal considered whether that approach involved an error of law or breached Article 6 of the European Convention on Human Rights.

1. Appeal dismissed. The FTT correctly applied the three-stage approach in Martland v HMRC [2018] UKUT 178 (TCC): whether the delay was serious or significant, whether there was a good reason for it, and all the circumstances, including the importance of efficient and proportionate litigation and compliance with statutory time limits.
2. The FTT was entitled to hear the late-appeal application together with the substantive appeal. The course caused no unfairness and gave the FTT a better understanding of the merits. The choice between a separate hearing, a combined hearing, or hearing the late-appeal application first was a case-management decision for the FTT. The Upper Tribunal would be reluctant to interfere absent unfairness or an error of law.
3. The FTT’s view that the substantive appeal was very likely to succeed did not compel the grant of permission. Merits were a relevant factor in the third-stage balancing exercise, but had to be weighed against the length and seriousness of the delay, the importance of complying with time limits for notices of requirement, the company’s continued trading while HMRC remained at risk, and the late and insufficient payments made to HMRC.
4. The Tribunal did not need to decide whether the proceedings fell within the civil or criminal limb of Article 6, or whether Article 1 of Protocol 1 was engaged. Even assuming that refusal of permission could contribute to a criminal conviction, that consequence did not make an extension mandatory. The FTT had taken the potential criminal sanctions and the merits into account and was entitled to find that countervailing factors outweighed them.
5. The Upper Tribunal declined to determine HMRC’s separate argument concerning the extent of the FTT’s jurisdiction over the notice, since that issue was unnecessary to dispose of the appeal.

• Upper Tribunal (Tax and Chancery Chamber): appeal against the FTT’s refusal to permit a late appeal dismissed. The Tribunal found no error of law in the FTT’s decision.