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Appeal rights: use them or lose them

Most of the unpleasant things that HMRC does (such as assessing tax or imposing penalties) are subject to a right of appeal. There are exceptions, including egregiously the imposition of an Accelerated Payment Notice, but we are not in this note concerned with those exceptions.

However, any appeal must generally be made within 30 days of the decision in question, whether that decision is the making of an assessment, the rejection of a claim or the imposition of a penalty, etc.

Of course, even in the “old days” appeals were subject to time limits. But it’s fair to say that in the old days those time limits were seldom strictly applied by HMRC. In most cases a late appeal was likely to be accepted if it was accompanied by something that looked remotely like a good excuse, and very often even if it wasn’t.

But that is no longer the case. For some years now HMRC have routinely refused late appeals unless there is a “reasonable excuse” for not making the appeal timeously. And where the First-tier Tribunal has had to consider the matter (effectively hearing an appeal against HMRC’s refusal to accept a late appeal, though that is not quite the way the law expresses it) the Tribunal has generally been no less deaf to entreaties than have HMRC.

“There is a public interest in the efficient conduct of litigation and we note that there would be considerable disruption to the Tribunal if applications were allowed to proceed out of time in the absence of good reasons being shown” (Finchley United Services Club). “A discretion has been given to the Tribunal to extend the time limit beyond the statutory period but this is only granted in exceptional circumstances rather than as a matter of course” (Kalra) “The Appellant has not offered any acceptable explanation for the delay other than that [the director] has been too busy with all the other problems” (Luddington Golf Club). Readers will get the general idea.

So what factors do HMRC say they might accept as a “reasonable excuse” for tardiness in appealing? Predictably, they are few and exceptional. Serious illness; unavoidable and unexpected absence; “civil disturbance”; sudden and unexpected disruption to a business or its records; loss of records through fire or flood (or, we suppose, famine pestilence or Death on a pale horse).

The point of this note is this: appeal rights are valuable. But they are perishable. Take care that you do not let them wither by default.

David Whiscombe

Consultant

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