[2011] UKFTT 323 (TC)

TC01183

Appeal number TC/2010/05924

Procedure - appeal out of time under s49 Taxes Management Act -no extension granted under case management powers in rule 5 -appeal not admitted

FIRST-TIER TRIBUNAL

TAX 

	KENNETH JOSEPH CARVER	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

				TRIBUNAL: MR J. DENT (JUDGE)
						MR P. JOLLY (MEMBER)

Sitting in public at 36 Dale Street Liverpool on 16 November 2010

Mr McCarthy of J M Accountancy Services for the Appellant

Mr O’Grady of H.M. Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2011

DECISION

Background
1.	This hearing concerned an application under rule 20 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 for an appeal to be admitted as the application was outside the time limit set down in section 49 of the Taxes Management Act. 
2.	The decisions of the Respondent, against which the Appellant wishes to appeal, were issued on 12 October 2005. 
3.	The Appellant made application on 21 February 2009 to bring late appeals against four assessments raised by the Respondents  on 12 October 2005
4.	The background to the appeal is long and complicated. The background is set out in detail in the Respondents’ submission, but briefly, it started in 2003 when the appellant received a Statutory Demand covering Tax years from 1997 to 2003. This was followed by a Bankruptcy Petition in 2004, which was settled by the appellant in May 2004. Discovery assessments were raised on 12 October 2005 covering the four years ended 5 April 2003 under Section 29 Taxes Management Act 1970. Hey were sent to him at 75 Parthenon Drive, his usual or last known place of residence. The appellant denied having seen these until December 2007 during the course of further Bankruptcy proceedings, commenced by the Respondents on 23 January 2007. The Bankruptcy proceedings included the amounts set out in the Discovery Assessments. The Appellant had paid the amount due under the assessments “Without Prejudice” to avoid bankruptcy.
5.	The Respondents stated that their post room records showed that the assessments had been sent to the appellant on 12 October 2005. The appellant told us, and we found as a fact, that he had received a letter dated 12 October 2005, but addressed to someone else referring to a different taxpayer.
6.	The Tribunal found as a fact that the assessments, with interest accrued to January 2006 were included in the Bankruptcy Petition filed on 23 January 2007, which was paid on 20 August 2007. In the finding of the Tribunal, the Appellant had become aware of the assessment during the course of 2007, and certainly by December 2007. 
7.	The Respondents wrote to the Appellant on 7 February 2008 referring to the assessments and to the fact that no appeal had been made against them. In the finding of the Tribunal, this was an opportunity for the Appellant to clarify his appeal rights. He made no attempt to bring appeals out of time until 23 February 2009, some 12 months later.
8.	The Appellant attended a hearing on 23 July 2008, when he would have had an opportunity to read a statement from Mr Martin, on behalf of the Respondents, once again drawing his attention to the Discovery assessments of October 2005. The Appellant also filed on 17 September 2008 a response to proceedings in which he intimated that he had become aware of the Discovery assessments in August 2007. The Appellant did not apply for leave to appeal out of time until 23 February 2009, after judgement was obtained by the Respondents.
9.	The application for the late appeal to be admitted came before the Tribunal on 16 November 2010. 
The Law
10.	We were referred to R (on the application of Cook) v General Commissioners of Income Tax (2009) BTC 168, which itself refers to the reasoning of Lord Drummond Young in Petition of IR Commrs for Judicial Review (Hugh Love) [2005] CSOH 135.
11.	Appeals out of time are governed by section 49 of the Taxes Management Act 1970, subsection (1) of which provides :
An appeal may be brought out of time if on an application for the purpose an inspector or the Board is satisfied that there was a reasonable excuse for not bringing the appeal within the time limited, and that the application was made thereafter without unreasonable delay, and gives consent in writing; and the inspector or the Board, if not satisfied, shall refer the application for determination by the Commissioners.
Decision
12.	We took into account all the information which was available. We found that the Appellant had reasonable excuse for not appealing the Assessments within the time limit of 30 days from 12 October 2005. However, the excuse ceased to operate by February 2008, when he was fully aware of the existence of the assessments and the 30 day time limit. He did not then proceed with reasonable expedition, and it was more than 12 months later when he made his application. By that time the assessments were more than four years old
13.	We consider that the granting of leave to appeal late  is an exception to the norm, and that the considerations of prejudice to the Respondents  and to the public interest in promoting the policy that challenges to assessments by way of appeal should be brought within the short period specified by the statute outweigh that of prejudice to the Appellant
14.	We find that the Appellant has not shown that he has a reasonable prospect of success if his appeal was admitted.
15.	We have considered the overriding objective in rule 2 of the Tribunal Procedure(First-Tier Tribunal)(Tax Chamber) Rules 2009. We do not find that it is appropriate to extend the time for appealing under rule 5. The appeal is not therefore admitted as it was made out of time.
16.	This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

JOHN N. DENT

TRIBUNAL JUDGE
RELEASE DATE: 16 MAY 2011