Case: Late appeal granted, HMRC’s conduct ‘chaotic’ and accountant’s conduct ‘deplorable’

[2019] UKFTT 0118 TC

Judge Richard Thomas

Decision released 16 February 2019

VAT – Permission to make late appeals to the tribunal against a VAT assessment and inaccuracy penalty for 05/15 and an inaccuracy penalty for 11/15 – Whether appeals made late: yes in the case of penalties no in the case of assessment – Martland & NT-ADA Ltd considered – Permission granted

Pramukh Enterprises Ltd [2019] TC 06984


The appellant in this case received VAT assessments in respect of input tax overclaimed on two VAT periods and penalties for deliberately overstating its input tax recovery.

The Tribunal reviewed the correspondence between HMRC and the appellant, the appellant’s case was handled by their accountants. There are two issues to consider, first was the appeal made late and second, if so, should permission to appeal be granted?

The Tribunal concluded that the VAT assessment appeal was (due to deficiencies in HMRC’s conduct) within time but the penalty appeals were made late (in one case over 18 months late).

In summary, the Tribunal must consider three factors when deciding whether to hear a late appeal, the so called ‘Denton stages’ (see Martland v Revenue & Customs Commissioners [2018] BTC 525):

(i)Whether the delay is ‘significant and serious’. The 18 month delay in this case met this test ‘by any standards’ (para 79);

(ii)The reasons for the delay; and

(iii)Whether granting a late appeal would prejudice either party.

In considering the second and third tests the Tribunal had already expressed its dissatisfaction with HMRC’s conduct earlier in the decision. At para 75 the FTT states ‘this narrative of events reveals total confusion within HMRC and in [the investigating officer’s] mind’. However, it was also highly critical of the appellant’s accountant. The Tribunal described their conduct as ‘deplorable’ (para 84) and, as a result it was ‘in the interest of justice to give permission to the appellant, not withstanding the long delay’.


The process by which businesses can challenge HMRC decisions is clearly set out in the law, HMRC guidance and their manuals. It is surprising that the officer in this case failed to follow the process strictly. However, the business was also badly served by the firm of accountants engaged to represent them. The appellant is facing significant VAT assessments due to inaccuracies HMRC view as being deliberate. This is a serious position for any taxpayer and it must be hoped that they will receive a high standard of professional support when the Tribunal hears the appeal they have made.

For commentary on the appeals process, see our In-depth commentary at ¶61-000.

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