Judgment summary
Matthew James applied for permission to bring a late appeal against HMRC's Review Conclusion Letter of 24 July 2025, which upheld but reduced a Personal Liability Notice (PLN) issued to him under paragraph 19(1) of Schedule 24 of the Finance Act 2007 (1).
The appeal was notified to the Tribunal on 09 January 2026, 139 days after the 30-day statutory deadline under sections 83G(3)(b) and 83G(7) of the Value Added Taxes Act 1994 (10, 14).
Applying the three-stage Martland test, the Tribunal found the delay serious and significant, found the reasons for the delay weighed against granting permission, and concluded that, despite the appeal having reasonable prospects of success, the overall balance came down against granting permission to pursue the late appeal (43).
Background
HMRC issued a VAT assessment dated 17 May 2024 to Arthur Skip Limited, of which Mr James was sole director, in the sum of £137,979 for VAT periods 10/22, 01/23, 04/23 and 07/23 (26).
HMRC issued a penalty assessment to the Company dated 30 August 2024 for £91,620.49, having concluded the inaccuracies were deliberate, which led to an original PLN being issued to Mr James on 06 September 2024 for £89,340 (26).
Mr James's challenges led to an amended VAT assessment on 27 June 2025 reducing denied input tax to £50,354, an amended penalty of £25,454.00, and an amended PLN on 10 July 2025 reducing his liability to £23,791 (27).
Following a review, the Review Conclusion Letter dated 24 July 2025 upheld the PLN but reduced it further to £11,137, concluding that only the under-declaration for the VAT period ended 10/22 amounted to a deliberate inaccuracy attributable to Mr James (27, 28, 30).
On 14 August 2025 an email was sent to HMRC on Mr James's behalf stating he did not have the 'education or energy' to continue the fight and asking about payment options, which the Tribunal found showed he had decided not to appeal and instead sought a time to pay arrangement (16, 18).
Efforts to agree time to pay continued until 15 December 2025, when HMRC's Targeted Enforcement Recovery Unit rejected his payment proposal and confirmed it would proceed with recovery action (20).
Mr James then notified his appeal to the Tribunal on 09 January 2026, 139 days after the 30-day deadline (21).
Core dispute
The dispute was whether the Tribunal should grant Mr James permission to notify a late appeal against the Review Conclusion Letter, applying the three-stage test from Martland v HMRC [2018] UKUT 178 (TCC) (6, 9).
The underlying substantive dispute, considered only to the extent relevant to assessing the merits for the late appeal application, concerned whether the under-declaration of VAT for the period ended 10/22 amounted to a deliberate inaccuracy attributable to Mr James as sole director of the Company, making him personally liable under paragraph 19(1) of Sch 24 FA 2007 (30, 31).
Court findings
At Stage 1, the parties agreed the appeal was notified 139 days late, and the Tribunal found this delay serious and significant, relying on Romasave (Property Services) Ltd v HMRC [2015] UKUT 254 (TCC) (10, 11, 12).
At Stage 2, the Tribunal found that Mr James understood he could appeal the Review Conclusion Letter but chose not to do so in August 2025 due to mental and physical exhaustion, instead pursuing a time to pay arrangement; he changed his mind only after HMRC rejected his payment proposal on 15 December 2025, fearing bankruptcy and loss of his home (24).
At Stage 3, the Tribunal found the appeal was not obviously very strong or very weak but had reasonable prospects of success, noting Mr James's earlier success in reducing the PLN by 87.5% (33, 29).
The Tribunal found Mr James would suffer material prejudice if refused permission, while prejudice to HMRC from the delay should not be given much weight (35, 36).
However, the Tribunal found the reasons for the delay, namely Mr James's deliberate choice not to appeal in time followed by a change of mind four months later, weighed against granting permission, as did the particular importance of respecting statutory time limits (40, 42).
Weighing all factors together, the Tribunal concluded that the balance came down against granting permission to pursue the late appeal (43).
Outcome
The Tribunal refused Mr James permission to bring his late appeal against the Review Conclusion Letter dated 24 July 2025 (43).
The decision notes the parties' right to apply for permission to appeal under Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, within 56 days of the decision being sent (44).
Major issues / areas of contention
- Whether a 139-day delay in notifying an appeal against a Review Conclusion Letter was serious and significant under the Martland test.
- The reasons for the delay, including Mr James's initial deliberate choice not to appeal and his later change of mind after a time to pay arrangement was rejected.
- The apparent merits of the underlying appeal concerning whether the VAT under-declaration for the period ended 10/22 was a deliberate inaccuracy attributable to Mr James as director.
- The balancing of prejudice to Mr James and to HMRC against the importance of litigation being conducted efficiently and statutory time limits being respected.