Cranham Sports LLP v The Commissioners for HMRC

On an application to bring a statutory tax appeal late, the tribunal must apply the Martland three-stage approach: assess the length of delay, identify its cause, and evaluate all the circumstances. The final stage requires a balanced assessment, with particular weight given to compliance with statutory time limits and efficient litigation.

An appellate tribunal must read the First-tier Tribunal's decision fairly and as a whole. It should not infer from the absence of an express reference that a relevant matter was ignored. Intervention for failure to consider a relevant matter requires a material omission which might have affected the outcome.

A clear offer of review under Taxes Management Act 1970 requires timely acceptance. Dissatisfaction with HMRC's position, and a request for further information, do not themselves amount to accepting that offer.

The appellant LLP challenged HMRC determinations and notices concerning whether the IR35 legislation applied to the provision of Barry Cowan's services to Sky. After HMRC issued its view of the matter, it offered an internal review and explained that the appellant had 30 days either to accept the review or notify an appeal to the First-tier Tribunal.

The appellant's representative promptly disputed HMRC's view and complained that material obtained from Sky had not been disclosed. However, no review was accepted and no appeal was notified within the statutory period. The First-tier Tribunal refused permission for a late appeal in a decision released on 18 April 2023. It applied Martland v HMRC [2018] UKUT 178 (TCC).

The appellant appealed, contending that the First-tier Tribunal had failed to take account of the missing Sky material, the correspondence and HMRC's conduct when evaluating all the circumstances.

1. Appeal dismissed. The First-tier Tribunal's refusal of permission to bring the late appeal disclosed no error of law.

2. The First-tier Tribunal was making an evaluative decision when applying the three-stage approach in Martland v HMRC [2018] UKUT 178 (TCC). An appellate tribunal should be slow to interfere with that assessment unless the tribunal has plainly erred in law. A failure to consider a relevant matter warrants intervention only if the omission might have affected the result.

3. The First-tier Tribunal had the appellant's position firmly in mind. It expressly recorded both the representative's expectation of a fuller response and the absence of the Sky material. Its failure to repeat those matters at the final balancing stage did not show that they had been ignored. A fair reading of the decision as a whole therefore defeated grounds 1 and 3.

4. The email sent on 8 December 2021 could not reasonably be construed as acceptance of HMRC's offer of an internal review under section 49C(3) of the Taxes Management Act 1970. It was an emphatic expression of dissatisfaction, not a notification accepting review. There was no alternative form of review which the appellant had merely failed to select. Grounds 2 and 3 consequently failed.

5. The First-tier Tribunal was entitled to find that any reasonable basis for delay had diminished after 25 January 2022, when HMRC's position was clear. It was not required to prescribe a precise further period that would have been reasonable. It was entitled to consider the whole delay, including the further delay after the late review request was refused, rather than treat the case as involving only 21 days' delay. Ground 4 failed.

6. Any costs application must be made and served within one month of release of the decision.

• Upper Tribunal (Tax and Chancery Chamber): Appeal dismissed. The Upper Tribunal upheld the First-tier Tribunal's refusal to admit the appellant's late appeal.
• First-tier Tribunal (Tax Chamber): On 18 April 2023, refused permission to bring the appeal late. It later refused permission to appeal its decision on 3 August 2023.
• Upper Tribunal (permission stage): On 20 November 2023, Judge Rupert Jones granted permission to appeal on four grounds.