In Cranham Sports LLP v HMRC [2024] UKUT 209, the Upper Tribunal (UT) refused to allow a late appeal in an IR35 case when the taxpayer’s representative filed objections against HMRC's conduct but failed to object to the outcome of Statutory Review in time.
- Following a long-winded IR35 enquiry involving Barry Cowan, a tennis commentator for Sky UK, HMRC raised Regulation 80 determinations for PAYE and NICs assessments.
- HMRC were asked to make a Statutory Review, which left the taxpayer’s representative frustrated by HMRC’s failure to answer points he had raised and respond to a failure to share information provided by Sky TV.
- The representative did not appeal HMRC’s decision, in error, he was expecting a reply from HMRC and the missing information.
- HMRC then informed the Appellant that the matter was now treated as settled by agreement under section 49C(4) Taxes Management Act 1970 on the basis that the 30-day statutory time limit had elapsed and the Appellant had neither accepted the offer of an internal review nor notified an appeal to the FTT.
- The missing information from HMRC arrived six months later. By then it was too late to do anything further.
The taxpayer’s representative appealed to the FTT and considered the Late Appeal conditions as established in Martland:
- Establish the length of the delay.
- Establish the reason(s) for the default.
- Evaluate all the circumstances of the case
The FTT found no case and dismissed the appeal because the deadline for the Statutory Review was not met.
On appeal to the Upper Tribunal, it found no error of law in the FTT’s decision and dismissed the appeal.
Editorial comment
A bitter end to a tax dispute following what might seem an all too familiar fact pattern. HMRC consistently ignores the taxpayer's arguments, and the taxpayer's representative gets frustrated by a lack of reasoning. The representative then misinterprets the nature of the correspondence and misses a deadline. If in doubt do contact the Virtual Tax Partner support team we are happy to give a second opinion in a dispute and take the strain off you.
External links
IR35
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?
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?
Late Appeals
When can you make a late tax appeal? What conditions must be met?
Discovery assessment and time limits
What is a Discovery Assessment? When can HMRC make a Discovery? What are the time limits for Discovery Assessment? Details, examples and current case law and developments
External links
Cranham Sports LLP v HMRC [2024] UKUT 209
