Josephine Mary Hayes v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal is granted only where the proposed appeal has a realistic prospect of success or there is another compelling reason. A concession relieving late-filing penalties does not extend the statutory filing deadline or deem a return to have been filed on time. Section 118(2) of the Taxes Management Act 1970 relieves the consequences of failure; it does not generally extend statutory time limits or confer the benefits of actual compliance. Public-law arguments may fall within the First-tier Tribunal’s jurisdiction where the statute permits, but jurisdiction need not be decided where the arguments have no arguable factual basis. An enquiry need not be closed while HMRC reasonably requires further information to assess the taxpayer’s return.

Josephine Hayes applied for permission to appeal to the Upper Tribunal against the First-tier Tribunal’s dismissal of her application for closure of HMRC’s enquiry into her 2019/20 tax return. The First-tier Tribunal held that the return was filed late, that HMRC had validly opened its enquiry under section 9A(2)(b) of the Taxes Management Act 1970, and that HMRC had reasonable grounds not to issue a closure notice.

The proposed appeal challenged the construction of section 118(2), relied on HMRC’s communications about late-filing penalties, and alleged legitimate expectation, abuse of power and unfairness. The central questions were whether the First-tier Tribunal had made an arguable error of law and whether either ground had a realistic prospect of success.

1. Permission refused. Neither ground disclosed an arguable material error of law or any other compelling reason for an appeal.
2. An appeal from the First-tier Tribunal lies only on a point of law. Permission is appropriate where the proposed appeal has a realistic, rather than fanciful, prospect of success, or exceptionally where there is another compelling reason. The grounds did not meet that threshold.
3. HMRC’s correspondence stated that late-filing penalties would not be charged if online returns were filed by 28 February 2021. It did not clearly or unambiguously extend the 31 January filing deadline, and could not establish a legitimate expectation that the deadline had changed. The First-tier Tribunal’s factual conclusions were unimpeachable.
4. The reasoning in Raftopoulou [2018] EWCA Civ 818 formed part of that decision’s ratio and applied to a late self-assessment return. Section 118(2) relieved a person from the consequences of failure where its conditions were met. It did not deem the required act to have been performed, and had no general time-extension function for statutory time limits under the Act. Even a permitted extension would not necessarily deem a return to have been filed on time for the separate time limit governing HMRC enquiries.
5. The Upper Tribunal did not need to determine the full scope of the First-tier Tribunal’s jurisdiction to consider legitimate expectation or abuse of power on a closure-notice application. Even if such arguments fell within the jurisdiction conferred by section 28A(6), they had no arguable factual basis because HMRC had made no clear promise to extend the filing deadline. The First-tier Tribunal also had reasonable grounds for refusing closure while HMRC lacked the full facts needed to assess the correctness of the return.

• Upper Tribunal (Tax and Chancery Chamber): permission to appeal refused on both grounds.
• First-tier Tribunal (Tax Chamber): application to close HMRC’s enquiry dismissed on 27 September 2024.
• First-tier Tribunal (Tax Chamber): permission to appeal refused on 30 January 2025.
• Upper Tribunal: permission refused on the papers on 27 May 2025; reconsideration was then held orally on 12 August 2025.