The First-tier Tribunal (FTT) has come to the aid of a taxpayer who claimed that he had been a victim of fraud in relation to claims for Enterprise Investment Scheme (EIS) relief, granting permission for him to make a late appeal against assessments and closure notices in respect of the claims.
In December 2018, the taxpayer had registered for self-assessment in order to claim relief for expenses. HM Revenue and Customs (HMRC) subsequently wrote to him to check his tax returns for the 2018/19 and 2019/20 tax years, explaining that they were looking into claims for EIS relief included in the returns. HMRC eventually issued assessments and closure notices totalling £9,912.
The taxpayer contacted HMRC stating that he believed he had been a victim of fraud. Following various correspondence between him and HMRC, he requested a statutory review, which was rejected as being out of time. He then appealed to the FTT.
He contended that the returns had been submitted without his knowledge or authority and the EIS relief payment had been sent to a third party. Despite requesting help from HMRC on a number of occasions, he had never been provided with advice on how to appeal. Instead he had been directed towards repaying sums he had never received and setting up a payment plan, which he had believed was the only option available to him.
The appeal had been made more than four months late, and the FTT agreed that the delay was both serious and significant. However, the FTT accepted that the taxpayer had difficulties with reading and writing and had not understood the letters sent to him setting out his appeal rights. He had believed that HMRC’s decision was final and therefore had no reason to contact HMRC to enquire about his appeal rights. The FTT was satisfied that he had acted reasonably, seeking assistance with time to pay as he had thought that repayment was his only option. The appeal had only been made after he sought help from someone else. In the circumstances, the FTT was satisfied that there was a good reason for the delay.
Granting permission to make a late appeal, the FTT concluded that the prejudice to the taxpayer in refusing the application would outweigh the prejudice to HMRC if it were allowed, and that the interests of justice and fairness weighed in favour of the taxpayer.