HMRC v MedPro Healthcare: Court of Appeal confirms Upper Tribunal's power to issue binding guidance on time extensions

The Court of Appeal has settled an important procedural question about the Upper Tribunal's authority to issue binding guidance to the First-tier Tribunal on exercising discretionary powers to extend time for appeals.

The case arose from HMRC's investigation into MedPro Healthcare Limited in early 2019, which resulted in assessments, penalties and personal liability notices. Three of the respondents' appeals were filed more than 30 days after HMRC's review conclusion letters. When the FTT refused an extension of time, the respondents appealed to the Upper Tribunal.

The central issue concerned whether the Upper Tribunal could properly issue guidance giving particular weight to certain factors when the FTT considers applications to extend time under section 83G(6) of the VAT Act 1994. That provision states simply that "an appeal may be made after the end of the period specified... if the tribunal gives permission to do so."

HMRC argued that the Upper Tribunal had improperly fettered the FTT's statutory discretion by issuing guidance in Martland v HMRC which required the FTT to attach "particular importance" to the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected.

Lord Justice Lewison, delivering the leading judgement, rejected HMRC's argument comprehensively. Drawing on R (Jones) v First Tier Tribunal and BPP Holdings Ltd v HMRC, he confirmed that developing structured guidance to ensure consistency across the tribunal system represents an important function of the Upper Tribunal. This extends to guidance on both interpreting and applying specialised statutory schemes.

The Court found persuasive the Supreme Court's endorsement in BPP of this court's earlier decision that tribunals should generally follow a similar approach to that taken in civil proceedings under the Civil Procedure Rules, even though those rules do not apply directly to tribunals. Significantly, the approved guidance in BPP itself attached significant weight to certain factors.

Lord Justice Lewison drew an analogy with costs awards by magistrates, where despite an "ostensibly unfettered discretion" under statute, appellate courts have properly laid down guidance and even rules to apply absent special circumstances. He cited Lady Rose's statement in Competition and Market Authority v Flynn Pharma Ltd that such guidance remains appropriate even where statutory powers appear unfettered.

The Court rejected the respondents' argument that applications for permission to appeal out of time should be treated differently from applications for relief against sanctions. Section 83G(1) provides that an appeal "is to be made" within 30 days—a statutory time limit no different in substance from time limits under the CPR. The consequences of non-compliance are identical: the appellant cannot proceed without permission.

Lord Justice Lewison emphasised that the Martland guidance requires the FTT to consider all circumstances of the case, expressly recognising judicial discretion remains. Guidance is just that—guidance. The FTT may depart from it when sound reasons exist. The specification of a time limit in statute itself justifies attributing significant weight to compliance, as time limits exist to be respected, not merely as target dates.

The appeal was allowed. The FTT must apply the Martland guidance when reconsidering the application for permission to appeal out of time.

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