How KANGS Successfully Appealed an HMRC Personal Liability Notice Out of Time
KANGS has a long history of acting for individuals, companies and organisations in tax disputes with HMRC.
One such recent instruction resulted in us successfully assisting our client, a former company director, in obtaining permission to Appeal a Personal Liability Notice issued by HMRC, despite being several months out of time and objections raised by HMRC against the Application.
Timothy Thompson of KANGS outlines the circumstances leading to this successful Application.
The Circumstances
Our client was the director of a labour supply company prior to it being liquidated. After the company ceased trading, HMRC issued an Information Notice requesting various documents required for a VAT Investigation, but the Notice was never received by our client.
In due course, HMRC issued penalty assessments against the company, pursuant to Schedule 24 of the Finance Act 2007, alleging that VAT returns which had been submitted were inaccurate.
A Personal Liability Notice for an amount exceeding £350,000 was then issued to our client alleging that the inaccuracies shown on the VAT returns were deliberate, thereby making our client personally liable for the company’s debt.
As the result of HMRC’s failure to properly serve the documents upon him and the confusion created, our client failed to submit an Appeal against the Notice within the required period, in fact, it was submitted eight months late.
HMRC objected to our client’s late Appeal, resulting in a Hearing before the First-tier Tribunal to determine the issue.
Requirements for a Successful Application to Appeal
In order to succeed in his Application for leave to Appeal, it was essential for our client to convince the Tribunal that his delay was justifiable. A difficult task given that, the case of Martland v The Commissioners for HM Revenue, the starting point is that permission should not be granted unless, on balance, the Tribunal considers that it should be.
How We Assisted Our Client
By way of preparation for our client’s Application, the team at KANGS:
- attended our client discussing at length the company’s trading history, the manner in which all VAT returns were completed, and the sequence of events which resulted in the failure by HMRC to effectively serve the relevant documentation,
- examined all pertinent documentation,
- advised our client on all relevant law, his position and the appropriate course to adopt,
- prepared all necessary documents including a detailed Witness Statement with accompanying exhibits,
- regularly communicated with all parties including the company liquidator, the Tax Tribunal and HMRC seeking to resolve a number of issues,
- identified and instructed appropriately experienced counsel to represent our client at the Hearing,
- attended to our client and counsel throughout the entire process, providing continuous support.
The Hearing
Counsel for our client sought to persuade the Court to allow our client’s Application emphasising:
- the strength of our client’s case,
- the improper service of documentation by HMRC,
- failure by HMRC to properly challenge the evidence of our client,
- the clear justifiable reasons behind the submission of our client’s late Appeal,
- the significant prejudice to our client arising from HMRC’s lack of activity.
The Successful Outcome
After hearing the evidence from the relevant witnesses but before closing submissions were due to be made, HMRC conceded its position and acknowledged that permission should be granted for our client to submit his Appeal and withdrew its objection generally.
Accordingly, the Tribunal confirmed the success of our client’s application thereby paving the way for the presentation of our client’s formal Appeal.
Naturally, our client was delighted with this successful outcome and KANGS now continues with the preparation of his formal Appeal.
How Can We Help You?
KANGS brings many years of experience in assisting individual and corporate clients involved in disputes with HMRC of every conceivable nature, including advising in interviews, initial enquiries and investigations, and defending complex civil litigation and criminal proceedings.
If you need assistance dealing with HMRC in matters such as a VAT enquiry, criminal investigation or any other type of tax dispute, please do not hesitate to get in touch. We would be delighted to hear from you, contact our team using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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