Judgment summary
This is a decision of the First-tier Tribunal (Tax Chamber) on an application by the Appellant, Richard Alderson, to reinstate his appeal after it was automatically struck out on 20 October 2025 for failure to comply with an unless order (1).
The underlying appeal concerns two notices of assessment issued on 11 May 2023 under paragraph 9 of Schedule 16 to the Finance Act 2020, totalling £80,564.44, on the basis that the Appellant had received Coronavirus Job Retention Scheme (CJRS) payments to which he was not entitled (11). Following review, the assessments were varied to a total of £76,538.17 (11).
The Tribunal traced the procedural history, including case management directions issued on 2 June 2025 requiring a list of documents, witness statements, and listing information, the Appellant's partial and late responses, an unless order issued on 26 September 2025, and the automatic strike out on 20 October 2025 (11-32). The Appellant applied for reinstatement on 23 October 2025 (33).
Applying the principles in Martland v HMRC, as adapted for reinstatement applications following Chappell v The Pensions Regulator and Carbon Six Engineering Limited v HMRC, the Tribunal assessed the seriousness of the breaches, the reasons for them, and all the circumstances of the case, including prejudice to HMRC and the consequences for the Appellant of losing his right of appeal (2-9, 45-60).
The Tribunal found that the breaches of the unless order were serious and significant, but concluded that there were mitigating circumstances, including the Appellant's difficulties as a litigant in person, his mental health, and the relatively short overall period of non-compliance, and that the balance under the overriding objective favoured reinstatement (57-60). The application for reinstatement was allowed (61).
Background
On 11 May 2023, HMRC issued two notices of assessment to the Appellant under paragraph 9 of Schedule 16 to the Finance Act 2020, in the total amount of £80,564.44, on the basis that he had received CJRS payments to which he was not entitled (11). Following a review, HMRC's conclusion letter of 11 January 2024 upheld the decision but varied the total due to £76,538.17 (11).
The Appellant, a litigant in person, submitted his notice of appeal on 5 February 2024 (12). HMRC's statement of case, provided on 14 April 2025, contended that £80,564.44 had been paid into the Appellant's business account for the Wheatsheaf Inn, that bank statements he provided did not evidence employees' entitlement to the payments, and that HMRC's own PAYE-based calculations identified inconsistencies (15).
On 2 June 2025, the Tribunal issued directions requiring a list of documents by 18 July 2025, witness statements by 15 August 2025, and listing information by 29 August 2025 (17). The Appellant did not comply with the list of documents direction, and the Tribunal sent a further letter on 30 July 2025 warning of possible strike out (18-19). The Appellant responded, out of time, on 15 August 2025, explaining that his prison sentence had led to the surrender of the business lease and loss of employee records (21-22).
HMRC applied for extensions of time in respect of witness statements (15 August 2025) and listing information (29 August 2025), and served their own witness statement and amended list of documents on 27 August 2025, noting the Appellant's continued non-compliance (23-25). The Appellant raised the possibility of ADR with HMRC on 11 September 2025, and HMRC reminded him on 12 September 2025 that Tribunal directions still applied (27-28).
On 26 September 2025, the Tribunal issued an unless order requiring, by 10 October 2025, written confirmation of intention to proceed and compliance with Directions 1 to 3, failing which the appeal would be struck out (29). The Appellant did not comply, and on 20 October 2025 the Tribunal confirmed the appeal had been automatically struck out as of 10 October 2025 (32). The Appellant applied for reinstatement on 23 October 2025, citing emails going into his junk folder (33).
Core dispute
The dispute before the Tribunal was whether the Appellant's appeal, automatically struck out under Rule 8(1) of the FTTTC Rules for failure to comply with an unless order, should be reinstated under Rule 8(5) and (6) of those Rules (2).
The Appellant sought reinstatement on the basis that he had not received relevant emails, which he said had gone into his junk folder, and that he faced personal difficulties, including depression following a custodial sentence, difficulty affording legal advice, and misunderstanding of the directions, particularly as to whether he himself needed to provide a witness statement (33, 41).
HMRC opposed reinstatement, submitting that the breaches were substantial and significant when viewed against the entire procedural history, that there was no good reason for the failures, and that there was no evidence, beyond the Appellant's own testimony, that the unless order had gone to his junk mail folder (44).
The Tribunal applied the three-stage approach derived from Martland v HMRC, as adapted to reinstatement applications following unless orders in Chappell v The Pensions Regulator and Carbon Six Engineering Limited v HMRC, considering the seriousness of the breaches, the reasons for them, and all the circumstances of the case (2-9).
Court findings
The Tribunal found that Direction 1 (list of documents) had, in substance, been complied with by the Appellant's email of 15 August 2025, even though not clearly stated, so there was no significant ongoing breach of that direction thereafter (47, 50).
As regards Direction 2 (witness statements), the Tribunal found the Appellant in breach from 29 August 2025, given HMRC's extension application, and that the Appellant had not provided a statement from himself, even though he intended to rely on his own evidence (48).
As regards Direction 3 (listing information), the Tribunal found the Appellant in breach from 5 September 2025, but considered this breach less serious, since the June Directions expressly allowed listing despite non-compliance (49).
The Tribunal found no compliance with the unless order in any of its four elements, namely confirmation of intention to proceed and compliance with Directions 1 to 3, and found these breaches, individually and cumulatively, serious and significant (51-52).
On the reasons for the breaches, the Tribunal was not satisfied on the balance of probabilities that the unless order had gone to the Appellant's junk mail folder, or that this was the true reason for non-compliance (53). Instead, the Tribunal found a combination of factors, including the Appellant not checking emails daily, difficulty managing the litigation, misunderstanding of the witness statement requirement, not realising he could apply for more time, hope of proceeding to ADR, and stress and depression (54). The Tribunal concluded these were not good reasons for the breaches (56).
Weighing all the circumstances, the Tribunal identified factors against reinstatement, including the need for litigation to be conducted efficiently and for directions to be respected, the seriousness of the breaches, the absence of good reasons, and a degree of prejudice to HMRC from the time and effort spent on the reinstatement application and ongoing appeal, though without significant evidential prejudice (57). Factors in favour of reinstatement included the Appellant's substantive, if late, response on documents, the relatively limited seriousness of the listing information breach, mitigating personal circumstances, the short overall period of non-compliance (four weeks at the unless order, six weeks at strike out), and the significant consequences for the Appellant of losing the ability to challenge assessments totalling £76,538.17 (58).
The Tribunal found the merits of the underlying appeal not to be a relevant factor, since there was no suggestion they were so strong as to be akin to a summary judgment scenario (59).
Outcome
The Tribunal concluded that, standing back and looking at all the circumstances as a whole, and in light of the overriding objective to deal with cases fairly and justly, the balance weighed in favour of allowing the appeal to be reinstated (60).
The Tribunal allowed the application for reinstatement and attached consequential directions for the onward management of the appeal (61-62).
The decision records the right of any dissatisfied party 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 (63).
Major issues / areas of contention
- Whether the Appellant's appeal, automatically struck out under Rule 8(1) of the FTTTC Rules for breach of an unless order, should be reinstated under Rule 8(5) and (6).
- Application of the three-stage Martland test, as adapted for reinstatement applications, comprising assessment of the seriousness of the breaches, the reasons for them, and all the circumstances of the case.
- Whether the Appellant's failure to comply with directions for a list of documents, witness statements, and listing information, and subsequently the unless order, constituted serious and significant breaches.
- Whether the Appellant's stated reason for non-compliance with the unless order, namely that the relevant email went to his junk mail folder, was established on the balance of probabilities.
- The relevance of the Appellant's personal circumstances, including depression, difficulty affording legal advice, and misunderstanding of the directions, as reasons for the breaches.
- The weight to be given to prejudice to HMRC, the need for procedural discipline, and the consequences for the Appellant of losing his right to challenge assessments totalling £76,538.17.
- Whether the underlying merits of the appeal were relevant to the reinstatement decision, applying the limited exception in Global Torch Ltd v Apex Global Management Ltd.