Judgment summary
This is a decision on an application by Bowland Inns and Hotels Limited for permission to bring an appeal out of time against a VAT assessment, opposed by HMRC (1). The application was determined on the papers without a hearing by Tribunal Judge Brooks (1, heading).
Applying the Martland three-stage test, the Tribunal found a delay of 134 days (17), caused by an administrative error by Bowland's representatives, KPMG, in failing to request a review of or appeal against the assessment in time (18). Having evaluated all the circumstances, the Tribunal dismissed the application (25).
Background
Bowland operates hotels and inns in the Northwest of England offering 'wedding packages', typically comprising a ceremony room, wedding breakfast, evening reception, and overnight accommodation, each separately charged to the customer (3). Bowland also offers similar packages for other events such as birthday celebrations, balls and conferences (3).
Having done so in its 05/21 VAT accounting period, Bowland accounted for VAT on food and overnight hotel accommodation within wedding packages at the temporary reduced rate under Groups 14 and 15 of Schedule 7A VATA during its 08/21 and 11/21 accounting periods (4).
On 30 May 2025 HMRC issued an assessment of £97,736 on the basis that Bowland made single composite supplies of wedding packages and should not have applied the reduced rate for its 05/21 period (5). Following a review and further information from Bowland, this was reduced to £48,019 (5). Bowland appealed against the review outcome on 28 January 2026, under reference TC/2026/00429 (6).
On 18 August 2025 HMRC issued a further assessment of £463,988 on the same composite supply basis for the 08/21 and 11/21 periods (7). A review was offered but not accepted by Bowland, which later discovered that no appeal had been made in time and appealed, together with the present application for permission to appeal late, on 28 January 2026 (7).
HMRC confirmed on 27 March 2026 that Bowland would suffer hardship if required to pay or deposit the disputed VAT, and directions were given for HMRC to file statements of case (8). The parties jointly applied to consolidate the appeals, but this was partially withdrawn by HMRC on 24 June 2026 because the appeals could not be consolidated until the application for permission to appeal late had been determined (9).
Core dispute
The dispute was whether the Tribunal should grant Bowland permission under section 83G(6) VATA to bring its appeal against the 18 August 2025 assessment out of time, the appeal having been made 134 days after the 30-day statutory deadline under section 83G(1)(a) VATA (15-17).
Bowland argued that the delay should be excused because it had appealed in time against a related assessment for an earlier period, had acted promptly once it discovered the error, the substantive issues were the same (characterisation of its supplies), and it could alternatively make a claim under section 80 VATA (20). HMRC opposed the application, submitting it was not for them to intuit acceptance of a review offer or submit review requests on a taxpayer's behalf, and that admitting the appeal would involve additional cost and evidence relating to different VAT periods (21-22).
Court findings
The Tribunal applied the three-stage approach from Martland v HMRC [2018] UKUT 178 (TCC), derived from Denton v TH White Limited [2014] EWCA Civ 906: establishing the length of delay, the reason for delay, and evaluating all the circumstances (11). It noted that the starting point is that permission should not be granted unless the Tribunal is satisfied on balance that it should be, with particular importance given to efficient and proportionate conduct of litigation and respect for statutory time limits, as confirmed in HMRC v Medpro Healthcare Ltd [2026] EWCA Civ 14 (12, 19).
The delay was agreed to be 134 days (17). The reason for the delay was an administrative error by KPMG in failing to request a review of, or appeal against, the 18 August 2025 assessment in time (18).
The Tribunal considered Bowland's points, including that it had appealed in time against the related 05/21 assessment, had acted promptly once the error was discovered, that the issues were the same, and that a section 80 VATA claim remained possible (20). However, it found that it was not for HMRC to intuit acceptance of a review or submit requests on Bowland's behalf (21), and that although the legal issues overlapped, the evidence for the different VAT periods was not the same, meaning additional cost and resource would likely arise (22). The Tribunal also declined to treat the hypothetical possibility of a section 80 VATA claim as relevant to the application before it (23).
Following HMRC v Katib [2019] UKUT 189 (TCC) at [56], the Tribunal held that failures by a litigant's adviser should generally be treated as failures by the litigant (13, 25). Citing HMRC v McCarthy & Stone [2014] UKUT 196 (TCC) at [50], the Tribunal found that KPMG's frank admission of an administrative error was commendable but did not amount to an explanation for missing the time limit (24).
Outcome
The Tribunal dismissed Bowland's application for permission to make a late appeal against the 18 August 2025 assessment (25).
Major issues / areas of contention
- Whether the Tribunal should grant permission under section 83G(6) VATA for Bowland to appeal out of time against the 18 August 2025 VAT assessment.
- The length of the delay in appealing, agreed to be 134 days.
- The reason for the delay, being an administrative error by Bowland's representatives, KPMG, in failing to request a review or appeal in time.
- Application of the three-stage Martland/Denton test for assessing late appeal applications.
- Whether failures by a taxpayer's adviser should be treated as failures by the taxpayer itself, per HMRC v Katib.
- Whether the availability of a potential section 80 VATA claim was relevant to the determination of the application.
- Whether overlapping legal issues with a related, timely appeal (against the 30 May 2025 assessment) justified admitting the late appeal.