A case in which the First-tier Tribunal (FTT) refused a company permission to make a late appeal against demands for import duty and VAT serves as a warning to businesses to ensure they understand their potential liabilities and, if they wish to appeal a decision made by HM Revenue and Customs (HMRC), to take the necessary steps promptly.
A company had completed customs declarations in its own name, acting as agent for a freight forwarder which in turn was acting as agent for an importer. HMRC considered the declared values of the goods to be incorrect and, on 2 October 2023, sent the company a decision letter stating that they intended to issue a demand for £9,368 in import duty and VAT, and informing the company that it could request a review or appeal to the FTT within 30 days. The demand was issued three days later.
On 26 October the company emailed HMRC asking if it was liable for the debt as the importer had ceased trading, despite having previously notified HMRC of the importer's bankruptcy and receiving confirmation that it would be jointly liable for any customs debt. It also requested details of the valuation methodology used by HMRC. Its initial notice of appeal to the FTT, on 24 November, was rejected: necessary information had not been included and an application for permission to make a late appeal had not been made. A further notice of appeal was lodged on 22 December.
The FTT observed that the appeal was either 51 or 48 days late: in its view, such a delay could not be described as anything other than serious and significant. The actions the company needed to take to request a review or lodge an appeal were clearly set out in the letter of 2 October. The company seemed to have wanted to continue correspondence to try and find a solution that avoided joint and several liability. Not making an appeal in the hope that a solution might be found carried a serious risk that time to appeal might run out. The FTT did not consider that there was a good reason why the company had not appealed in time.
The FTT took into account the need for litigation to be conducted efficiently and at proportionate cost. It accepted that the company's grounds for challenging HMRC's decision, as set out in the notice of appeal, were weak. Refusing permission, the FTT concluded that the lack of any good reason for the delay and the need to ensure that time limits are observed outweighed any prejudice to the company of not permitting its appeal to proceed.