Anyone tempted to pursue litigation without professional assistance should take note of a case in which a businessman’s persistent delay in getting his case in order resulted in his appeal against a six-figure tax bill being struck out without his arguments ever having been considered on their merits.
Following an investigation, HM Revenue and Customs (HMRC) decided that the man was liable for more than £940,000 in Income Tax in respect of undeclared income and gains over a period of about 15 years. He contended that no tax was due in that he was domiciled abroad during the relevant period and that work giving rise to the disputed income had been performed outside the UK. Without the benefit of legal representation, he lodged an appeal to the First-tier Tribunal (FTT).
The FTT subsequently issued a succession of increasingly firm orders requiring him, amongst other things, to set out his case in detail and to disclose a list of documents on which he intended to rely. When he failed to meet a deadline set by the last of those orders, his appeal was automatically struck out. He subsequently applied to reinstate the appeal.
Ruling on the matter, the FTT found that he had, over a lengthy period, failed to give proper attention to the conduct of his appeal. He had been obstructive and almost belligerent in his communications with HMRC and the FTT, and had for many months made no serious attempt to locate relevant documents. There was no reason, other than apathy, for his failure to appoint legal representation.
In nevertheless permitting his appeal to proceed by the narrowest of margins, the FTT found that he had used his best endeavours to comply with what he mistakenly believed to be the deadline. He had provided the documents required, albeit after the deadline passed, and had finally appointed a lawyer to represent him.
In upholding HMRC’s challenge to that decision, the Upper Tribunal (UT) found that the FTT had failed to take account of the full extent of his non-compliance with its orders. It also had regard to the irrelevant fact that the initial burden of proof in the proposed appeal would rest upon HMRC.
Remaking the decision, the UT found that his conduct of the appeal demonstrated a long history of non-compliance with the FTT’s orders, requirements and requests which was both serious and significant. It reached the clear conclusion that his appeal should remain struck out.