A recent decision by Nominet UK highlights the evidential hurdles businesses must overcome when...
The First-tier Tribunal (FTT) has granted a taxpayer permission to make a late appeal against HMRC assessments and closure notices after finding that he may have been a victim of fraud involving the Enterprise Investment Scheme (EIS). The decision demonstrates the Tribunal’s willingness to prioritise fairness where taxpayers have acted reasonably but been misled or disadvantaged.
Case Background
In December 2018, the taxpayer registered for self-assessment to claim relief on expenses. HM Revenue & Customs (HMRC) later launched enquiries into his 2018/19 and 2019/20 tax returns after noting claims for EIS relief, a scheme designed to encourage investment in early-stage businesses through tax incentives.
Following its investigation, HMRC issued assessments and closure notices totalling £9,912.
The taxpayer then contacted HMRC, stating that he believed he had been a victim of fraud, claiming that his tax returns had been submitted without his knowledge and that the EIS relief funds had been paid to a third party. Despite seeking help multiple times, he was not advised on how to appeal and instead was directed towards repaying the funds through a payment plan.
Tribunal’s Findings
By the time he formally appealed, the deadline had passed by more than four months. While the FTT accepted the delay was serious and significant, it also recognised that:
- The taxpayer had reading and writing difficulties and had misunderstood his appeal rights.
- He believed HMRC’s decision was final and thought repayment was his only option.
- He acted promptly once he obtained assistance from someone who explained his rights.
The Tribunal concluded that there was a good reason for the delay and that refusing permission to appeal would cause greater prejudice to the taxpayer than allowing it would cause to HMRC. In the interests of justice and fairness, permission to make a late appeal was granted.
What This Means for Taxpayers
This case highlights the importance of seeking professional tax advice when dealing with HMRC, especially if fraud or unauthorised activity is suspected. It also reinforces the principle that the Tribunal may allow late appeals where genuine hardship or misunderstanding has prevented timely action.
Q&A Section
Q: What is the Enterprise Investment Scheme (EIS)?
The EIS is a government-backed initiative that offers tax relief to investors who buy shares in qualifying early-stage companies. It’s designed to help smaller businesses raise capital.
Q: Can a taxpayer appeal HMRC decisions after the deadline?
Yes - in exceptional circumstances. The First-tier Tribunal can grant permission for a late appeal if the taxpayer can show a good reason for the delay and that justice would be better served by allowing it.
Q: What should you do if you suspect tax fraud in your name?
You should contact HMRC’s fraud helpline immediately and seek advice from a qualified tax disputes solicitor. Do not make payments or agree to repayment plans until your case has been reviewed.
Q: How can a solicitor help with tax appeals?
A solicitor experienced in HMRC disputes and investigations can:
- Assess whether HMRC’s decision is open to appeal.
- Draft and file your appeal correctly.
- Liaise with HMRC or the Tribunal on your behalf.
- Protect your rights where fraud or procedural errors are suspected.
Contact Us
If you believe you’ve been the victim of tax fraud or need advice on appealing an HMRC decision, our expert tax dispute solicitors can help. We provide clear, practical guidance and represent clients in dealings with HMRC and the Tax Tribunal.
📞 Call us on 01284 701323 or 📧 email law@willettsolicitors.com to arrange a confidential consultation.