Shane de Silva v The Commissioners for HMRC

Introduction

1. The Appellant, with the permission of Judge Thomas Scott given following an oral hearing, appeals against a decision of the First-tier Tribunal (Tax Chamber) (“the FTT”) issued in summary form on 18 February 2020, for which full findings of fact and reasons were issued on 20 May 2020 (“the Decision”).

2. In the Decision, the FTT considered an application by the Appellant for permission to notify late appeals to HMRC in respect of certain assessments for income tax and associated penalty and surcharge determinations (HMRC having refused to accept such late appeals) and dismissed it. The FTT’s decision

3. There is no dispute about the facts background facts found by the FTT, as set out at [3] to [14] of the Decision: 3. In February 2013, HMRC requested self-assessment returns from Mr De Silva in respect of the tax years 2009/10, 2010/11 and 2011/12. In the same month, Mr De Silva appointed ADHI Accountants to assist him in completion of the returns. 4. HMRC did not receive any of those self-assessment returns from Mr De Silva. 5. The self-assessment tax return of Mr De Silva for the tax year 2012/13 was submitted on 1 November 2013 but was rejected as various pages were missing. 6. On 18 November 2013, HMRC issued notices of assessment with respect to the tax years ending April 2005 to April 2012. 7. On 22 November 2013, Mr De Silva telephoned HMRC and explained that there were inaccuracies contained within the notices of assessment of HMRC. The self-assessment notes of HMRC detail Mr De Silva stating that he did not owe the sums referred to and to his telling HMRC to take him to court. 8. Subsequently, in February 2016, HMRC commenced legal proceedings against Mr De Silva in the County Court. 9. On 1 August 2016, Deputy District Judge Apple ordered that blank self-assessment returns for the tax years 2005 to 2012 be provided to Mr Silva which were subsequently sent to him by HMRC. 10. On 16 September 2016, self-assessment returns were provided by Mr De Silva for the tax years 2005-12 and 2013 which were rejected by HMRC. 11. On 28 July 2017, HMRC obtained judgment in the County Court against Mr De Silva. 12. On 17 August 2017, Mr De Silva appointed his current representatives (ASL Partners). On the same day, ASL Partners first notified HMRC of the intention of Mr De Silva to pursue an appeal. 13. In December 2017, the judgment obtained against Mr De Silva was set aside to enable Mr De Silva to seek to make an appeal to the First-tier Tribunal (Tax Chamber). 14. As stated above, on 6 February 2018, an appeal was submitted to the First-tier Tribunal (Tax Chamber) on behalf of Mr De Silva. HMRC objected to the application of Mr De Silva to make a late appeal.

4. After setting out extracts from the Upper Tribunal decision in William Martland v The Commissioners for HM Revenue and Customs [2018] UKUT 0178 (TCC) (“ Martland ”) and The Commissioners for HM Revenue and Customs v Katib [2019] UKUT 189 (TCC) , the FTT moved on to its discussion of the case (which also included various findings of fact as to the events which were relied on as reasons for the Appellant’s delay in appealing to HMRC).

5. At [20], the FTT recorded that “In the present case, it is not in dispute between the parties that the delay was anything other than serious and significant with the intention to appeal being notified to HMRC from 551 to 1338 days late.” The correctness of this statement was not disputed before us.

6. It was also noted at [21] that HMRC had “commenced proceedings in the County Court in February 2016 to recover the monies outstanding. HMRC contends that it was only after the County Court proceedings had been instituted in 2016 that Mr De Silva took any steps in relation to the assessments.”

7. From [22] to [34] of the Decision the FTT examined individually the various reasons that had been advanced for the delay. As there is no dispute about the FTT’s evaluation of those various reasons, we consider them no further (beyond observing that we accept, as the parties have, the FTT’s findings as to those reasons).

8. The FTT then moved on to its evaluation of the circumstances as a whole, and its overall conclusion, in the following seven paragraphs: 35. In relation to evaluating the circumstances of the case as a whole, Mr Hussain on behalf of Mr De Silva explained at the hearing that he had prepared tax calculations based upon invoices relating to Safe Hands Security Systems provided to him by Mr De Silva and obtained from Mr De Silva’s own computer. That is the security and electrical services business of Mr De Silva that we were told he had been running since about 2009. 36. We were told also by Mr Hussain at the hearing that the invoices relied upon by him and provided to him by Mr De Silva would have been available prior to the first of the assessments having been issued in late 2013. That renders it even more difficult to comprehend the delay by Mr De Silva in seeking to appeal against the assessments given the existence of the invoices at that point in time. 37. The calculations of ASL Partners provided at the hearing putting forward alternative income tax calculations for Mr De Silva detail income from the self-employment of Mr De Silva in excess of £34,000 and £41,000 in the tax years 2009/10 and 2010/11 respectively (and similar figures in later years) which indicates that the self-employment of Mr De Silva was clearly generating income at a consistent level over a number of years with consequential income tax implications. Mr De Silva would clearly have been aware of that at the time that the income was generated as it was his own safety and electrical services business. 38. Considering the circumstances as a whole, we find that there is little prejudice to Mr De Silva and that the merits of the appeal succeeding at first blush are dim. 39. Applying the three-stage test in Martland and having considered the case of Angel Parlour Ltd [2019] TC 07093 to which we were referred by the representatives of Mr De Silva, we find that the reasons given by Mr De Silva plainly are not reasonable excuses for the lateness of Mr De Silva in filing an appeal. DECISION 40. We have concluded, in all the circumstances of the case, that Mr De Silva has not given a sufficiently good reason for a serious and significant delay in making an appeal. 41. We refuse Mr De Silva permission to make a late appeal.