In Abdul Vahab Kharadi v HMRC [2020] TC 07686, the First Tier Tribunal (FTT) granted permission to appeal out of time for the penalty but denied the appeal in respect of VAT registration in part due to a misunderstanding of the appeals' process by the appellant's accountants.

The decision concerned whether appeals against VAT compulsory registration and failure to notify penalties were made out of time and, if so, whether the FTT should give permission for late appeals.

  • On 10 June 2016, HMRC wrote to Mr Kharadi stating that he needed to be registered for VAT and made an assessment of £10,458.20.
  • HMRC again wrote to Mr Kharadi, on 5 September 2016 with a notice of penalty assessment of £5,490.55.

Mr Kharadi received neither of the above two letters as he had moved address earlier. In July 2018 Mr Kharadi received a 'statutory demand' and he appointed accountants to deal with HMRC on his behalf.

  • After correspondence with HMRC over an eight-month period, the accountants notified the appeal against the VAT assessment and a penalty assessment to the FTT on 9 April 2019.
  • HMRC opposed the appeal on the basis that it was out of time and applied to have the appeal struck out.

In making the decision, the FTT found that:

  • As regards the initial two-year delay from the 10 June 2016 letter, Mr Kharadi could not appeal within 30 days as he was unaware of its contents.
  • With respect to the eight-month delay from August 2018 to April 2019, Mr Kharadi’s accountants were under the impression that correspondences with HMRC were an 'appeal'. HMRC failed in its statutory duty to offer a review at the same time as notifying Mr Kharadi of the penalties.

The FTT granted permission to appeal out of time in respect of the penalty but denied the taxpayer’s appeal in respect of registration. It found this eight-month delay was due to misunderstanding the VAT appeal procedure by Mr Kharadi’s accountants and this was held not to be a good reason.


If there is a disagreement with HMRC you can ask an HMRC officer not previously involved in the matter to review the decision or appeal to an independent tax tribunal (not to HMRC as the accountants assumed) to decide the matter. Appeals must be made within 30 days of the date of the notice of assessment.


How to appeal an HMRC decision (subscribers)
What type of decision can you appeal? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Grounds for Appeal: Adviser error
This note considers when it is possible to claim reliance on an adviser as a reasonable excuse, or as an example of taking reasonable care.

How to appeal a tax penalty
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic? This note details the process for tax penalties.

Appeals: Late
When can you make a late tax appeal? What conditions must be met?

External links

Abdul Vahab Kharadi v HMRC [2020] TC07686