Taxpayers who are unsure how to deal with any correspondence they receive from HM Revenue and Customs (HMRC) would be well advised to seek professional assistance, as was demonstrated by a recent case in which the First-tier Tribunal (FTT) refused a taxpayer permission to appeal out of time against discovery assessments and penalty assessments totalling more than £75,000.

HMRC had contacted the taxpayer in September 2022, advising that they believed he may have received rental income which had not been declared. After HMRC issued a formal information notice, he was granted several extensions of time to comply. He failed to provide the requested information, however, and in January 2024 HMRC issued assessments and penalties. In March 2024 he sent a letter to HMRC, which was treated as late appeal against the assessments and penalties. HMRC rejected the appeal on the basis that no reasonable excuse for the delay had been provided. He appealed to the FTT.

The taxpayer claimed that he had not appreciated that appeals should be lodged within 30 days even if full details of income and expenses were not available until after that date. He said that he had not realised he had to appeal, and had believed that if he filed returns in order to show the true tax position, HMRC would cancel the assessments and penalties. He also contended that HMRC's delay in responding to a Subject Access Request (SAR) was the reason for the delay in appealing.

The FTT considered that the delay, although not extensive, was not trivial. It did not consider that the taxpayer had established a good reason for the delay amongst the reasons given. The argument that he believed that information from varying sources was required before an appeal could be made was not consistent with the submission that he had not realised he had to appeal. The notices sent to him had included clear information on how to appeal and the deadline for doing so. Given the history of the case, the FTT considered that he had known that deadlines were set for responses to HMRC, as he had previously been granted multiple extensions of time to provide information during the enquiry process. The letter he had sent in March 2024 did not refer to waiting for a response to an SAR.

The prejudice to him in refusing permission to appeal was obvious: if permission were not given, he would not be able to challenge assessments that amounted to significant sums. However, the assessments had been raised after he had failed to provide any information to HMRC in the course of an enquiry spanning considerably more than a year, despite being granted repeated extensions of time. In all the circumstances of the case, the FTT was not satisfied that permission for a late appeal should be granted.