Thomas Hanlon v The Commissioners for HMRC

An appeal to the Upper Tribunal may be brought only on a point of law. Permission requires an arguable, material error of law with a realistic prospect of success. Where the First-tier Tribunal has refused to admit an out-of-time permission application, the Upper Tribunal may admit it only if the interests of justice require it.

Here, permission was granted on grounds that the FTT may have failed to make adequate findings about the VAT evaded and about the conduct and knowledge relevant to dishonesty and attribution. Those grounds remain to be heard; the Upper Tribunal did not decide the merits.

Thomas Hanlon, a director of Cardiff Cash & Carry Ltd (the Company), challenged his liability for a £242,243 penalty imposed under the Value Added Taxes Act 1994. The First-tier Tribunal dismissed his appeal, finding that his dishonest conduct was attributable to the Company’s penalty and that he should pay the full amount.

The FTT released its decision on 27 February 2024. It refused to admit Mr Hanlon’s out-of-time application for permission to appeal on 12 February 2026. The Upper Tribunal initially refused to admit his application, then reconsidered that decision at a hearing on 23 September 2026. The questions were whether the application should be admitted and, if so, whether permission should be granted on any of the proposed grounds.

1. The application for permission to appeal was admitted. Under Rule 21(7) of the The Tribunal Procedure (Upper Tribunal) Rules 2008, where the FTT has refused to admit an out-of-time permission application, the Upper Tribunal may admit it only if it is in the interests of justice to do so.

2. In applying that requirement, the Tribunal weighed the delay in applying to the FTT, the fact that reliance on an adviser was not itself a good reason, and potential prejudice to HMRC against the nine-month period taken to release the FTT decision, the seriousness and significance of its conclusions for Mr Hanlon, and the identification of arguable errors of law. The latter considerations outweighed the former.

3. Permission was granted on two grounds. First, it was arguable that the FTT had failed to determine, or make sufficient findings about, the VAT the Company evaded or sought to evade. Second, it was arguable that the FTT had failed to determine, or make sufficient findings about, the conduct and subjective knowledge of the Company and/or Mr Hanlon needed to support its conclusions on dishonesty and attribution. These are permission-stage findings only; the appeal on those grounds will be heard later.

4. Permission on the remaining grounds was refused. An appeal is not a rehearing. Disagreement with evidence or findings does not establish an error of law where the FTT made no finding of the kind alleged, or where its findings were rational and open to it on the evidence. No application to the FTT for disclosure of a recording or transcript of the PN160 meeting had been shown. The Tribunal made no decision on admitting the proposed witness statements of Daniel Booth and John Naylor.

1. Upper Tribunal (present decision) — admitted the application and granted permission on two grounds, refusing permission on the remaining grounds.
2. Upper Tribunal (14 May 2026) — refused to admit Mr Hanlon’s application; reconsidered that decision after his request for a hearing.
3. First-tier Tribunal (12 February 2026) — refused to admit Mr Hanlon’s out-of-time application for permission to appeal.
4. First-tier Tribunal (27 February 2024) — dismissed Mr Hanlon’s appeal against the penalty.