Judgment summary
Mr Andrius Kazlauskas applied for permission to bring a late appeal against an excise duty assessment of £16,588 and an excise penalty of £6,386 issued by HMRC under s 12(1A) Finance Act 1994 and schedule 41 to the Finance Act 2008 (1). HMRC opposed the Application (1).
The Tribunal acknowledged that administrative failures on its own part had hindered timely consideration of the Application, for which it offered its apology (2).
Applying the three-stage Martland approach, the Tribunal found the delay of five years and nine months to be serious and significant, found the reasons given for the delay insufficient, and concluded that, on balance, permission should not be granted (24-28). The Application was dismissed (28).
Background
On 18 April 2018, Mr Kazlauskas was stopped by UK Border Force officers at Dover, who found and seized 75kg of hand-rolling tobacco in his vehicle (4).
On 2 November 2018, HMRC issued an assessment to excise duty of £16,588 and a penalty of £6,386 (5). In an email of 9 April 2019, Mr Kazlauskas explained to HMRC that he had agreed, on the suggestion of a Polish driver, to transport the tobacco for €300 to earn "easy money", and did not realise it was prohibited (5).
The deadline to appeal was 30 days from the date of the assessment and penalty, namely 2 December 2018 (6). The Tribunal did not receive appeal documents until 31 August 2024, and Mr Kazlauskas had used the wrong form (6). The appeal was nonetheless registered on 2 December 2024, five years and nine months late (7).
Mr Kazlauskas had neither paid the excise duty nor made a Hardship Application (8). A series of administrative errors followed, including emails from Mr Kazlauskas not being copied to HMRC or added to the Tribunal file, culminating in the appeal being struck out on 2 January 2026 by Judge Blackwell, who was unaware of certain emails and of the penalty appeal (9-14). On 26 January 2026, Judge Bailey directed that the appeal be reinstated in its entirety (15).
Directions were then issued requiring Mr Kazlauskas to explain the delay (16). On 4 February 2026, he explained he was unfamiliar with UK legislation, lacked means for legal representation, supported a young son and a 71 year-old mother, and was in low-paid employment (17). His Hardship Application was granted on 20 February 2026 (18). As Mr Kazlauskas lived in Lithuania and could not attend an in-person hearing, and the Tribunal could not list a video hearing, Judge Bailey decided the application would be determined as a paper hearing (19).
Core dispute
The issue was whether Mr Kazlauskas should be granted permission to bring his appeal against the excise duty assessment and penalty out of time, given the appeal was five years and nine months late (7, 23).
Court findings
The Tribunal applied the Martland three-stage approach, as endorsed in Medpro Healthcare Ltd, considering the length of delay, the reasons for delay, and all the circumstances of the case (21-23).
The Tribunal found the delay of five years and nine months to be serious and significant, noting that even a three-month delay against a one-month time limit had been described as such in Romasave (Property Services) Ltd v HMRC (24).
The reasons given for the delay, namely unfamiliarity with UK legislation and lack of means to obtain legal representation, were considered (25).
In evaluating all the circumstances, the Tribunal had regard to the weakness of the underlying appeal, noting that Mr Kazlauskas had been paid to transport the tobacco, viewing it as an opportunity to make "easy money" (27). The Tribunal gave particular importance to the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected (26-27).
Outcome
The Tribunal concluded that, on balance, given the significant and serious delay, Mr Kazlauskas should not be granted permission to proceed with his appeal out of time. The Application was dismissed (27-28).
Major issues / areas of contention
- Whether a late appeal, five years and nine months out of time, against an excise duty assessment and penalty should be admitted.
- Application of the Martland three-stage test for late appeals: length of delay, reasons for delay, and evaluation of all the circumstances.
- Weight to be given to administrative failures by the Tribunal in handling the appellant's correspondence and the Hardship Application.
- Whether unfamiliarity with UK legislation and lack of means to obtain legal representation justified the delay.
- The relevance of the underlying strength or weakness of the appellant's case to the exercise of discretion.