In CSweby v HMRC [2022] UKFTT 122 (TC) (6 April 2022), the First-tier Tribunal (FTT) dismissed HMRC’s application for a retrospective extension of time for having submitted its statement of case more than three years late, despite this dismissal resulting in the taxpayer winning her appeal.
Ms Sweby’s appeal was classified as a standard case, which meant that HMRC was required to deliver its statement of case to the FTT and the appellant within 60 days of the FTT sending the notice of appeal to HMRC. Originally, the statement of case was due in 2016, but HMRC successfully applied for an extension of time until 60 days after the release of an FTT decision in three appeals that were heard together and which concerned a similar scheme and claim for losses as Ms Sweby’s scheme and claim. However, HMRC missed that extended deadline (16 September 2018) and, due to a series of clerical/administrative errors, including HMRC’s misapprehension that Ms Sweby’s appeal had been stayed until determination of a further FTT case that was heard in March 2021, failed to apply for a further extension of time. HMRC finally submitted its statement of case on 1 December 2021.
In deciding to dismiss HMRC’s application, the FTT applied the guidance of the Upper Tribunal in Martland [2018] UKUT 178 (TCC), which applies not only to late appeal applications, but also to applications for relief from sanctions for failure to comply with rules, directions and orders. In accordance with Martland, the FTT dismissed HMRC’s application for a retrospective extension of time because:
HMRC’s delay was serious and significant: the statement of case was submitted more than three years late;
the reasons for HMRC’s failure to submit the statement of case on time were caused by a series of its own administrative errors, all of which had no (or very little) merit; and
the prejudice likely to be caused to the appellant as a result of retrospectively permitting the severely delayed submission of the statement of case (i.e. HMRC’s pleadings) was more significant than the prejudice to HMRC of not allowing its application.
Why it matters: In appropriate circumstances, where HMRC unnecessarily and without good reason delays serving its statement of case for a significant and serious amount of time, it is in the interests of justice to not retrospectively approve HMRC’s delayed submission even if (as happened in this case) that prevents HMRC from contesting the taxpayer’s appeal so that the taxpayer wins its case by default.
In CSweby v HMRC [2022] UKFTT 122 (TC) (6 April 2022), the First-tier Tribunal (FTT) dismissed HMRC’s application for a retrospective extension of time for having submitted its statement of case more than three years late, despite this dismissal resulting in the taxpayer winning her appeal.
Ms Sweby’s appeal was classified as a standard case, which meant that HMRC was required to deliver its statement of case to the FTT and the appellant within 60 days of the FTT sending the notice of appeal to HMRC. Originally, the statement of case was due in 2016, but HMRC successfully applied for an extension of time until 60 days after the release of an FTT decision in three appeals that were heard together and which concerned a similar scheme and claim for losses as Ms Sweby’s scheme and claim. However, HMRC missed that extended deadline (16 September 2018) and, due to a series of clerical/administrative errors, including HMRC’s misapprehension that Ms Sweby’s appeal had been stayed until determination of a further FTT case that was heard in March 2021, failed to apply for a further extension of time. HMRC finally submitted its statement of case on 1 December 2021.
In deciding to dismiss HMRC’s application, the FTT applied the guidance of the Upper Tribunal in Martland [2018] UKUT 178 (TCC), which applies not only to late appeal applications, but also to applications for relief from sanctions for failure to comply with rules, directions and orders. In accordance with Martland, the FTT dismissed HMRC’s application for a retrospective extension of time because:
HMRC’s delay was serious and significant: the statement of case was submitted more than three years late;
the reasons for HMRC’s failure to submit the statement of case on time were caused by a series of its own administrative errors, all of which had no (or very little) merit; and
the prejudice likely to be caused to the appellant as a result of retrospectively permitting the severely delayed submission of the statement of case (i.e. HMRC’s pleadings) was more significant than the prejudice to HMRC of not allowing its application.
Why it matters: In appropriate circumstances, where HMRC unnecessarily and without good reason delays serving its statement of case for a significant and serious amount of time, it is in the interests of justice to not retrospectively approve HMRC’s delayed submission even if (as happened in this case) that prevents HMRC from contesting the taxpayer’s appeal so that the taxpayer wins its case by default.
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