Tribunal denies late appeal in tax security case

Tribunal denies late appeal in tax security case

The First-tier Tribunal (Tax Chamber) recently ruled against Preston Benson in his application for a late appeal concerning a notice of requirement (NOR) for Pay As You Earn (PAYE) and National Insurance Contributions (NICs) issued by HM Revenue and Customs (HMRC). The Tribunal's decision underscored the necessity of adhering to statutory time limits in tax matters.

The case arose from a security demand issued to Peckham Levels Limited (PLL) and Mr Benson, its director, for unpaid PAYE and NICs. The security, amounting to £165,725.46, was issued on 10 August 2023, after PLL failed to comply with previous payment arrangements with HMRC. Mr Benson sought to appeal the NOR after the statutory 30-day period had elapsed, citing stress and a lack of legal advice as reasons for the delay.

During the hearing, conducted via remote video, the Tribunal examined the procedural history, including Mr Benson's interactions with HMRC and the financial difficulties faced by PLL. Mr Benson, represented by Aparna Nathan KC, argued that the delay was due to the overwhelming circumstances and his sabbatical during the issuance of the NOR.

The Tribunal, led by Judge Michaela Sneldersgill Hunter, applied the legal test for granting a late appeal, considering the length of the delay, reasons for the delay, and overall circumstances. It found the delay of over seven months to be serious and significant, with insufficient justification provided for the failure to appeal within the statutory period.

In its decision, the Tribunal highlighted the importance of statutory time limits in protecting public revenue, particularly in cases involving NORs, which aim to prevent companies from accruing further tax liabilities. It noted that Mr Benson's continued trading without settling the security undermined the statutory purpose of the NOR.

The Tribunal acknowledged the severe prejudice Mr Benson might face, including potential criminal conviction, but concluded that this did not outweigh the need for compliance with statutory deadlines. It emphasised that allowing a late appeal could lead to further litigation and resource demands on HMRC.

This ruling serves as a reminder of the critical importance of timely compliance with tax obligations and the limited grounds on which late appeals can be granted. Practitioners in tax law should take note of the Tribunal's strict adherence to procedural rules in such cases.

Learn More

For more information on tax compliance and appeals, see BeCivil's guide to English Data Protection Law.