Judgment summary
This is an application by Visu Tech Limited for permission to bring a late appeal against assessments totalling £36,035.84 issued by HMRC on 24 February 2023 to recover overpaid Coronavirus Job Retention Scheme (CJRS) grant payments for the tax years 2020-21 and 2021-22 (1).
The appeal to HMRC should have been made within 30 days, by 26 March 2023, but was not made until 25 February 2025, 702 days later. HMRC refused permission for a late appeal, and the Appellant then appealed to the Tribunal on 12 March 2025 (1).
Applying the Martland approach, the Tribunal found the delay to be serious and significant, found no good reason for the delay, and concluded that the balance weighed heavily against granting permission. The application was dismissed (37, 42, 46, 47).
Background
Schedule 16 of the Finance Act 2020 provides for the taxation of CJRS payments, and paragraph 9 allows an officer to assess a person who has received CJRS payments to which they are not entitled, with parts 4 to 6 of the Taxes Management Act 1970 (TMA 1970) applying to appeals against such assessments (2).
Under s.31A TMA 1970, notice of appeal must be given in writing to HMRC within 30 days of the notice of assessment. Under s.49(2), a late notice of appeal may be given if HMRC agree or the Tribunal gives permission (3).
The Appellant has been trading since 2013, and Mr Chidurala is its sole director. It is an IT company developing products and providing IT consultancy services (8). From July 2021 its registered office was 4 Ambassador Place, Stockport Road, Altrincham WA15 8DB (9).
HMRC opened a compliance check of the Appellant's CJRS payments in June 2022, and there was correspondence and a telephone meeting between the parties between June 2022 and January 2023 (10-18). On 24 February 2023, HMRC issued a cover letter and three notices of assessment totalling £36,035.84, each setting out the Appellant's appeal rights, including the requirement to write within 30 days if it disagreed (19-20).
Further HMRC correspondence followed in March and May 2023 regarding penalties, concluding that no penalty would be charged and that the compliance check was complete (21-22). In or around October 2024, an HMRC officer or agent attended the Appellant's office to demand payment, after which Mr Chidurala instructed Chris Calder of Calder Compliance and Consulting (23).
An attempt to appeal directly to the Tribunal in October 2024 was withdrawn as the Appellant had not used HMRC's appeal process first (24). On 25 February 2025, Mr Calder wrote to HMRC requesting a late appeal, citing remote working arrangements as the reason for the delay (25). HMRC rejected the late appeal request on 6 March 2025 and again on 11 March 2025 (26-27). The Appellant then submitted its Notice of Appeal to the Tribunal on 12 March 2025 (28-29).
Core dispute
The dispute was whether the Appellant should be granted permission to bring a late appeal against the assessments, given that the appeal was made 702 days after the statutory 30-day deadline (1, 37).
The Appellant put forward differing explanations for the delay at different stages: first, that staff were working remotely under government guidance so post was not addressed when received; second, that Mr Chidurala personally had contracted Covid-19 and self-isolated, preventing him from reviewing the assessments; and third, articulated for the first time at the hearing, that the Notices of Assessment had never actually been received by the Appellant at all (38-41).
HMRC argued that Covid-19 restrictions had ceased by February 2023, that it was unreasonable for no one to check post at the business address over such a long period, and that the Appellant had deliberately disregarded the assessments in the hope the matter would be overlooked, only taking action once Debt Management attended its premises (26, 30).
Court findings
The Tribunal applied the three-stage Martland approach: establishing the length of delay, establishing the reasons for the delay, and evaluating all the circumstances of the case (4, 36).
On length of delay, the Tribunal found the delay of 702 days to HMRC, and to 12 March 2025 for the Tribunal appeal, to be plainly significant and serious (37).
On reasons for the delay, the Tribunal was not persuaded by any of the three conflicting explanations put forward on the Appellant's behalf. The first explanation (remote working of staff generally) was undermined by HMRC's evidence that Covid-19 restrictions had ceased and by Mr Chidurala's own evidence that staff were working in the office at the time (39). The second explanation (Mr Chidurala's personal illness) did not explain the delay after he returned to the office in around March 2023 (40). The third explanation (that the assessments were never received at all) was not accepted, particularly because Mr Calder had been able to attach pdf copies of the Notices of Assessment to the Notice of Appeal, with no credible explanation of how he obtained them if they had never been received, and because this account was inconsistent with earlier explanations given on the Appellant's behalf (41). The Tribunal concluded that the Appellant had not established any good reason for the delay (42).
On all the circumstances, the Tribunal noted that HMRC's assertion that the appeal lacked reasonable prospects of success was not pressed or reasoned, so no findings were made on the underlying merits (44). The Tribunal acknowledged that refusal of permission would mean the Appellant lost the ability to challenge the assessments, but held this was not decisive, following Katib (45). The Tribunal found that the balance weighed heavily against granting permission, given the very long delay, the lack of any good reason for it, and the need for litigation to be conducted efficiently and for statutory time limits to be respected (46).
Outcome
The application for permission to bring a late appeal was dismissed (47).
The Tribunal noted that any party dissatisfied with the decision had a right to apply for permission to appeal under Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, with any such application to be received within 56 days of the decision being sent (48).
Major issues / areas of contention
- Whether permission should be granted for a late appeal against CJRS assessments made 702 days after the statutory 30-day deadline.
- Application of the three-stage Martland test: length of delay, reasons for delay, and all the circumstances of the case.
- Assessment of three conflicting explanations given by or on behalf of the Appellant for the delay, none of which the Tribunal accepted.
- Whether the Notices of Assessment had in fact been received by the Appellant, given that copies were later produced with the Notice of Appeal.
- Whether the prejudice to the Appellant of losing its right to challenge the assessments outweighed the need for statutory time limits and efficient litigation to be respected.