Candido Pereira Rodrigues v The Commissioners for HMRC

An appeal to the Upper Tribunal lies only on a point of law, and permission requires a realistic prospect that the First-tier Tribunal made a material error of law. Appellate tribunals should not interfere with factual findings or evaluative judgments merely because another conclusion was possible. In deciding whether to admit a late appeal, the tribunal must assess the length and reasons for delay and balance the prejudice to both parties, including the apparent strength of the underlying challenge. A substantial financial consequence does not, by itself, justify overlooking significant unexplained delay. A penalty liability notice issued to a company officer under paragraph 19 of Schedule 24 is a notice in its own right. Section 83G of the Value Added Tax Act 1994 does not govern an appeal against such a notice.

Candido Pereira Rodrigues applied for permission to appeal against the First-tier Tribunal (Tax Chamber) decision released on 13 June 2024 in TC/2020/044/94. The FTT had refused permission for him to make late appeals against two penalty liability notices totalling £737,124.73, relating to corporation tax and VAT penalties imposed on Pazzia Limited.

The FTT refused permission to appeal on both grounds. The Upper Tribunal had initially refused the renewed application on the papers, but reconsidered it following an oral hearing. The proposed appeal challenged the FTT’s findings concerning the delay and its assessment of prejudice under the Martland framework.

1. Permission refused. Neither proposed ground disclosed an arguable material error of law.
2. The challenge to the finding of significant delay was in substance a challenge to factual findings and evaluative judgments. The appellate restraint described in FAGE UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 and Volpi v Volpi [2022] EWCA Civ 464 applied. The FTT was entitled to consider evidence concerning the applicant’s advisers when determining whether the notices had been served and explaining the delay.
3. Both penalty liability notices were issued under paragraph 19 of Schedule 24. Paragraph 19(1) required HMRC to specify by written notice to the company officer the portion of the penalty attributable to that officer. Paragraph 13(1) did not apply to a notice issued under paragraph 19; paragraph 19(5) instead applied specified provisions as if the notice were an assessment of a penalty.
4. Section 83G of the Value Added Tax Act 1994 applied to appeals under section 83, and section 83 did not include an appeal against a penalty liability notice. In any event, the applicant was the person to whom the notices were issued and was appealing against those notices. The fact that the notices depended on penalties issued to the company did not make him a person other than the relevant appellant for section 83G(1)(a)(ii).
5. At the third stage of Martland, the FTT had undertaken the required balancing exercise. It considered the significant unexplained delay, the applicant’s evidence, the apparent weakness of the proposed challenge, the substantial prejudice to him, and the resources required of HMRC if the appeals proceeded. The amount at stake did not require the delay to be overlooked.

• Upper Tribunal (Tax and Chancery Chamber): permission to appeal refused.
• First-tier Tribunal (Tax Chamber): refused permission to appeal against its decision released on 13 June 2024 in TC/2020/044/94.