Judgment summary
The hearing took place by video using Microsoft Teams and was held in public [1]. The Tribunal delivered its decision orally at the end of the hearing, giving full findings of fact and reasons [2]. Following an application by Storm dated 3 June 2026 for a statement of reasons, this decision notice sets out the full findings of fact and reasons [3].
Storm wished to appeal against a C18 post clearance demand notice issued by HMRC on 21 November 2023 for £161,262.85 of customs duty and import VAT, relating to the correct customs classification code for certain steel bins imported by Storm [4].
A hearing had been arranged on 26 May 2026 to determine Storm's hardship application and to decide the late appeal application [8]. On the morning of the hearing, Storm offered to pay the tax or duty, making the hardship application irrelevant, so the only remaining issue was the late appeal application [9].
The Tribunal considered whether it had jurisdiction to hear the late appeal application where hardship had not been granted and the tax had not been paid, and concluded it should determine the late appeal application first [10] to [16]. The Tribunal then applied the principles for late appeals and refused permission [17] to [63].
Background
HMRC had issued a similar demand in 2022 using a different customs classification code, referred to as the 2022 demand. Storm had notified an appeal to the Tribunal against the 2022 demand within the 30 day time limit, and HMRC had agreed under s 16(3) Finance Act 1994 that the appeal could proceed without payment of the VAT or duty and without security [5].
In October 2023, HMRC withdrew the 2022 demand as they concluded they had used the wrong customs code. This was replaced by the 2023 demand, which used a different customs code [6].
Storm's appeal against the 2023 demand was made approximately ten months after the statutory deadline. HMRC also refused Storm's hardship application [7].
HMRC completed their review of the decision to issue the 21 November 2023 demand on 29 February 2024. The review conclusion letter stated that Storm could appeal to the Tribunal within 30 days [21].
Storm's agents, Maersk Logistics and Services UK Limited, wrote to the Tribunal on 15 March 2024 attempting to reactivate the previous appeal against the 2022 demand [22]. On 18 March 2024, HMRC explained that the 2022 appeal could not be revived and advised awaiting a new decision before beginning the appeal process again [23].
HMRC corrected this on 25 and 26 April 2024, explaining that a new appeal had to be submitted, which Mr Ganley accepted was clear to him at that time [24]. Despite further confirmation on 6 June 2024, no action was taken until HMRC chased on 23 July 2024, and Maersk replied on 30 July 2024 confirming no appeal had been submitted [25].
On 15 August 2024, Mr Ganley contacted HMRC after receiving a demand for payment. HMRC responded on 19 August 2024 that they would hold off collection but would release the amount if no appeal was submitted by 31 August 2024 [26].
Maersk tried to lodge an appeal online on 23 August 2024 but encountered technical difficulties. By 30 August 2024, the Tribunal advised submitting by post, and HMRC advised on 2 September 2024 that this should be done [27]. Maersk did not send the appeal by post at that time [28].
Nothing happened until 17 December 2024 when Storm contacted HMRC after receiving a letter threatening to wind up the company for non-payment [29]. The Tribunal found that Storm did not know the appeal had not been submitted until 17 December 2024 [30]. The appeal was eventually submitted online by Maersk on 28 January 2025 [31].
Core dispute
The Tribunal had to decide two matters. First, whether it had jurisdiction to hear a late appeal application where hardship had not been granted and the tax had not been paid, and if so, whether the late appeal application should be determined before any hardship application [10] to [16].
Second, whether permission should be given to allow Storm's appeal against the 2023 demand to be notified to the Tribunal outside the statutory 30 day time limit [8] and [9].
The underlying subject matter of the intended appeal concerned the correct customs classification code for certain steel bins imported by Storm [4].
Court findings
On jurisdiction, HMRC submitted through Ms Brown that the Tribunal had no jurisdiction to hear a late appeal application where hardship had not been granted and the tax had not been paid, relying on Rule 22 of the Tribunal Rules and Rule 22(4) which requires proceedings to be stayed until a hardship application is determined [10] and [11].
The Tribunal did not accept this submission. It held that Rule 20(4)(b) provides that the Tribunal must not admit the appeal unless it gives permission for the appeal to be notified outside the time limit. Until the late appeal application has been determined, the appeal cannot be admitted and there are no proceedings which can be stayed pending determination of the hardship application under Rule 22(4). The Tribunal should therefore determine the late appeal application first [12] to [14].
The Tribunal noted that s 16(3) FA 1994 provides that an appeal shall not be entertained if the tax has not been paid and hardship has not been granted, but this presupposes an otherwise valid appeal. As s 16(1F) FA 1994 provides that a late appeal may be made only if the Tribunal gives permission, no valid appeal is made until the Tribunal gives permission, supporting the conclusion that a late appeal application can and should be determined before any hardship application [15].
On the late appeal, the Tribunal applied the principles in Martland v HMRC [2018] UKUT 0178 (TCC), approved in HMRC v Medpro [2026] EWCA Civ 14, and the rule in HMRC v Katib [2019] UKUT 189 (TCC) that a failure of an adviser should be treated as a failure of the applicant [17] to [19].
The Tribunal found the 30 day period expired on 28 March 2024, and the appeal, submitted on 28 January 2025, was ten months late, which was both serious and significant [32].
The Tribunal accepted there was a good reason for delay between 18 March 2024 and 26 April 2024 due to HMRC's earlier confusing advice, and for the ten day period between 23 August 2024 and 2 September 2024 due to technical problems [34] and [38]. It found no good reason for the delay between 26 April 2024 and 23 August 2024, or after 2 September 2024 up to 17 December 2024, or for the further six weeks after 17 December 2024 [37], [42] and [44].
The Tribunal held that Storm was seriously let down by Maersk but that nothing justified departing from the general rule in Katib that an adviser's failure is attributed to the litigant. Storm was aware from 26 April 2024 that an appeal needed to be submitted but took no action [45].
The Tribunal rejected the argument that HMRC's email of 19 August 2024 extended the statutory deadline, finding it dealt only with the collection process [46] and [47]. In summary, there were good reasons for about two and a half months and no good reason for the remaining seven and a half months [48].
Weighing all the circumstances, the Tribunal found the serious delay with no good reason for most of it pointed strongly to refusal, given the need for time limits to be respected and finality in tax matters [55] and [56]. It accepted there might be little prejudice to HMRC but noted HMRC and the Tribunal would still have to devote resources [57]. The prejudice to Storm in having to pay the tax was, per Katib at [60], unlikely on its own to tip the balance [59]. The Tribunal rejected the competitive disadvantage argument, as Storm could still apply its preferred code and appeal any further demand [60]. It had some sympathy over the history of the withdrawn 2022 demand and the expectation that hardship would be a formality, but did not find this a good reason for granting permission [61]. It declined to take into account the alleged strength of the underlying appeal, as this would require a detailed fact-specific exercise which Martland warned against [62].
Outcome
The Tribunal was not persuaded it was appropriate to give permission for the appeal to be notified outside the statutory 30 day time limit. The late appeal application was dismissed and the Tribunal will close its file [63].
The Tribunal made no decision on the hardship application, as it was no longer relevant given the refusal to admit the late appeal and the fact that Storm would have been willing to pay the tax to allow the appeal to proceed in any event [64].
Any party dissatisfied has a right to apply for permission to appeal under Rule 39 of the Tribunal Rules, with the application to be received not later than 56 days after the decision is sent [65].
Major issues / areas of contention
- Whether the Tribunal had jurisdiction to determine a late appeal application where hardship had not been granted and the tax had not been paid.
- Whether the late appeal application should be determined before any hardship application under Rule 20(4) and Rule 22(4) of the Tribunal Rules.
- Whether the delay of ten months in notifying the appeal was serious and significant.
- Whether there was a good reason for the delay in submitting the appeal.
- Whether the failure of the agent, Maersk, should be attributed to Storm under the principle in Katib.
- Whether HMRC's email of 19 August 2024 extended the statutory deadline for appealing.
- Whether, weighing all the circumstances, permission should be granted to notify the appeal outside the statutory 30 day time limit.