In Cranham Sports LLP v HMRC [2023] TC8794, the First Tier Tribunal (FTT) denied a late appeal against IR35 PAYE determinations caused by adviser error. They should have known better and the sum involved and other circumstances did not justify the appeal.

  • Cranham Sports LLP (Cranham) provided a member, Mr Barry Cowan, to Sky as a tennis commentator.
  • HMRC concluded that the arrangements between Cranham and Sky were such that if they formed a direct contract between Mr Cowan and Sky they would represent a Contract of Employment.
  • This made Cranham an employment intermediary and IR35 applied.
  • HMRC issued Regulation 80 PAYE Determinations on 17 November 2021 accordingly.
  • An appeal was filed within the 30-day window as required and raised a complaint about the management of the enquiry.
  • HMRC then issued their view of the matter on 9 December 2021 which confirmed their view that the determinations had been validly raised and gave the taxpayer’s advisors another 30-day window to request a Statutory Review or notify the tribunal of their intention to appeal.
  • Correspondence ensued, but no appeal was made until 60 days after the deadline.

The FTT found that:

  • The principles in Martland should apply:
  • A 60-day delay, in the context of a 30-day appeal window, was both significant and serious.
  • There was no adequate reason for the delay. It was human error on behalf of the taxpayer’s advisors.
  • Other circumstances in this case included:
    • The advisors communicated their immediate dissatisfaction with the ‘view of the matter’ letter.
    • HMRC sent without prejudice settlement discussions to the advisors after the appeal window closed suggesting they considered the matter open.
    • While continuing to express dissatisfaction with HMRC’s conduct, the advisors did not act promptly in requesting a review and filing an appeal when it became clear one was required.
    • The advisor’s conduct is to be treated as the conduct of the applicant.
    • The tax at stake and the loss of the opportunity to challenge that sum did not carry significant weight.
  • On balance, the FTT did not allow late appeals.

The appeal was dismissed.

Useful guides on this topic

IR35: Off-Payroll Working
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?

Employment status & detailed checklist
Why is it important to check my employment status? What tests should I use? What is the recent case law?

Employment status checklist (freeview)
How do you check for Employment Status? What are the tests for Employment Status? Am I employed or self-employed or a worker of some other type?

Recovery of PAYE: Regulation 80 and 72 assessments for PAYE
When can HMRC assess an employer or an employee for unpaid Pay-As-You-Earn (PAYE) and National Insurance Contributions (NICs)? What is a Regulation 80 determination? What is a Regulation 72 determination? Who is assessed and what are the conditions?

Statutory Review (by HMRC)
What is a Statutory Review? Is it automatic? What happens in a Statutory Review? Can you challenge a Statutory Review's findings? Can you influence a Statutory Review? 

External links

Cranham Sports LLP v HMRC [2023] TC8794

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