Tajinder Pawar v The Commissioners for HMRC

When deciding whether to admit a late tax appeal, the tribunal should apply the three-stage approach in Martland v HMRC: assess the delay, identify its reasons, and evaluate all the circumstances.

The merits should be considered only to the limited extent that the tribunal can see, without much investigation, that the underlying appeal is very strong or very weak. Under [2025] UKUT 00255 (TCC), the tribunal should not give ex ante weight to the importance of efficient litigation or compliance with statutory time limits unless the statutory scheme requires it. An adviser’s failure does not automatically excuse the litigant, and a litigant retains personal responsibility where the evidence does not establish a good reason for inaction.

The appellant challenged a First-tier Tribunal decision refusing permission to appeal out of time against a personal liability notice for a penalty imposed on a company in relation to inaccurate VAT returns.

The appeal was lodged about three years and two months after the statutory deadline. The appellant relied on alleged HMRC agreement to corrective action, the risk of bankruptcy, the strength of the proposed appeal, and failures by his adviser.

After the hearing, the Upper Tribunal considered the subsequent decision in Medpro Healthcare Ltd and Kalvinder Ruprai v HMRC. The central issues were whether the FTT had erred in its Stage 3 assessment and whether particular importance could lawfully be given to respecting statutory time limits.

1. Appeal and remaking. Grounds 1 to 3 were dismissed. The new ground concerning Medpro Healthcare Ltd and Kalvinder Ruprai v HMRC was allowed. The FTT decision was set aside because it had treated the need to respect statutory time limits as carrying particular importance. The Upper Tribunal remade the decision and refused permission for the late appeal.

2. Applicable approach. The tribunal followed the three stages in Martland v HMRC. It must assess the length and significance of the delay, the reasons for default, and all the circumstances. The underlying merits may be considered only where they are obviously strong or weak without detailed investigation.

3. The appellant’s proposed appeal was not obviously strong. Whether the VAT inaccuracy was deliberate required investigation of his state of mind. The possibility of corrective action did not prevent the original returns from being inaccurate or establish that the penalty was unsustainable. Corrective action was also out of time and did not answer other disputed matters.

4. The FTT had considered the risk of bankruptcy and the adviser’s failures. Katib v HMRC did not establish that an adviser’s failure was always attributed to the litigant, but neither did instructing an adviser discharge the litigant from all responsibility. The appellant had not provided evidence of his communications with the adviser or shown a good reason for doing nothing after receiving the review conclusion letter.

5. The conflicting Upper Tribunal decisions on ex ante weight were resolved by following the later decision in Medpro Healthcare Ltd and Kalvinder Ruprai v HMRC. Without special weight being given to statutory time limits, the unjustified delay of more than three years outweighed the prejudice to the appellant and the possibility of bankruptcy. The appeal was dismissed.

• Upper Tribunal (Tax and Chancery Chamber): set aside the FTT decision and remade it, refusing permission for the late appeal.
• First-tier Tribunal (Tax Chamber): refused permission for the appellant to appeal out of time against HMRC’s review decision: [2023] UKFTT 81 (TC).