< Go Back Adviser Incompetence no grounds for a Late Appeal Posted: Jul 22, 2019In an extraordinary case; Mohammed Hafeez Katib v HMRC [2019] UKUT 189 the
Upper Tribunal (UT) decided that incompetence of an adviser was insufficient justification for a late appeal; overturning the earlier decision of the First Tier Tribunal (FTT) who originally allowed the late appeal. The UT held that:
The general requirement is that time limits must be followed, and late appeals allowed exceptionally . The tribunal may give permission for an appeal to be made outside
the statutory time limit where it would serve the interests of justice. The taxpayer had been a director of a company that became insolvent; the appellant took no action until HMRC served Personal Liability Notices on him (placing liability on him and not the company). The appeal period was 30 days but appeals were not submitted until at least a year after then and the director engaged an adviser who's advice was quite unorthodox , including telling HMRC that the taxpayer was dead! The adviser failed to deal with anything properly whilst telling the director that all was in hand. The FTT allowed the late appeal, largely due to the behaviour of the adviser, which was said to be a “frolic” of his own.
HMRC advanced three arguments why the late appeal should not be
granted but only the first was accepted by the UT; that the FTT
gave “insufficient consideration to the stricter approach to compliance
with time limits” following a Supreme Court decision. In BPP Holdings & Ors v HMRC [2017] UKSC 55 It is not uncommon for HMRC to issue its statement of case late, or
to be slow in providing other information for upcoming hearings: in this
case, HMRC served its statement of case 14 days late, failed to disclose or provide information on time and failed to provide all that was required. The appellants applied for a debarring order.
The SC had to decide whether an earlier Court of Appeal decision on the matter should be
upheld, and the debarring order remain, or to allow HMRCs appeal. The SC
found:
That the FTT judge had clearly carefully considered both the
prejudice caused to BPP by HMRC’s delay and the disadvantage the
debarring order has on HMRC. Allowing HMRC to rely on its public duty to protect the public
interest, to avoid the debarring order, would set a dangerous precedent
and discourage public bodies from living up to the standards expected in
the conduct of litigation. Although the debarring order would improve BPP’s change of success,
that could always be said about any debarring order and it should only
be considered a reason to overturn the order in exceptional
circumstances. There were no exceptional circumstances here. The SC dismissed HMRCs appeal and upheld the decision to issue a debarring order. The same principles were applied in respect of the late appeal case, above, prejudice to either party, precedent and were the circumstances exceptional. In Mr Hafeezkatib's case he knew the appeals were beyond late, his agents conduct bizarre and was left with no excuses to rely upon.
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