Background
Ian Mihill sought permission to bring late appeals against HMRC assessments and penalties totalling £875,623, excluding interest. The First-tier Tribunal had found that the relevant decisions were notified to him and refused permission for the late appeals. It applied the approach in Martland v HMRC.
The FTT also refused Mr Mihill permission to appeal. He renewed his application to the Upper Tribunal, which initially refused it on the papers. On reconsideration at an oral hearing, Mr Mihill advanced three proposed grounds: that HMRC had been obliged under section 49 of the Taxes Management Act 1970 to accept his late appeals; that the FTT had wrongly applied Martland and Katib; and that it had not separately considered whether the delays were serious and significant.
The Court’s Holding
Judge Jeanette Zaman refused permission to appeal on all grounds. Although section 49 requires HMRC to agree to a late appeal if its statutory conditions are met, the Tribunal held it was not arguable on the FTT’s findings that HMRC had failed to consider those conditions. HMRC had sought further information about the claimed illness and bereavements, received no further update, and was entitled not to be satisfied that there was a reasonable excuse.
The Tribunal held that the FTT had applied the correct approach. The Court of Appeal’s decision in HMRC v Medpro Healthcare Ltd confirmed that the Martland guidance, amplified by Katib, remained appropriate, including according significant weight to statutory time limits. The FTT had considered the varying lengths of delay and the merits of the underlying decisions. It also separately identified seriousness and significance at the first stage of the test; seriousness had been conceded, leaving significance for determination.
Key Takeaways
- Permission to appeal to the Upper Tribunal requires an arguable, material error of law, not disagreement with the FTT’s evaluative judgment.
- HMRC must accept a late appeal under section 49 TMA 1970 where the statutory conditions are met, but the taxpayer must establish a reasonable excuse and prompt action once it ends.
- The Martland/Katib framework remains the proper guidance for late appeals, and tribunals may give substantial weight to compliance with time limits.
Why It Matters
The decision reinforces that very substantial tax liabilities do not, by themselves, justify reopening expired appeal rights. A taxpayer seeking a late appeal must provide evidence linking the asserted excuse to the delay and must act without unreasonable delay once any impediment ceases.
It also confirms the limited scope for appellate intervention in late-appeal decisions: the FTT’s balancing exercise will generally stand unless it reveals a legal error, rather than merely an outcome a party considers harsh.