Appeals, disputes and investigations
Reasonable excuse for missing deadline
The First-tier Tribunal (FTT) has found that while the agent had failed to respond to HMRC by the deadline, given the specific circumstances of the case it was fair and just to allow the taxpayer’s appeal to be reinstated.
An appeal was brought to the FTT as a result of HMRC denying business property relief (BPR) claimed on loan notes in an estate. The appellant’s agent appealed a notice of determination issued by HMRC. However, the agent then failed to comply with an ‘unless order’ in time, meaning the appeal was struck out. The agent then applied for reinstatement and also submitted an application to bring the application out of time.
The agent had acted for the taxpayer for many years and had experience of the tribunal process. However, notifications from HMRC and the FTT started going to his junk folder and they therefore went unseen. Upon the agent receiving written correspondence regarding the case, he contacted the FTT and HMRC promptly. HMRC argued that it was the taxpayer’s responsibility to keep tabs on the progress and not blindly rely on their adviser.
The FTT found that the agent’s failings to respond to HMRC were serious and significant but could partly be attributed to the issues with emails going to junk. It also found that the agent’s failure to have diarised a follow-up if HMRC failed to submit its statement of case by the agreed deadline, alongside the email issue, was dramatic. Usually, failure of an agent is attributed to the taxpayer. However, the taxpayer was elderly with no knowledge of the tax system and put their faith in their agent and therefore it was fair and just to allow the out of time application.
The FTT therefore allowed the appeal to be reinstated.
Rohit Kotecha v HMRC [2025] UKFTT 330 (TC)
From Tax Update April 2025, published by S&W Partners LLP
Practical Points
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