In the matter of an appeal to the First-tier Tribunal (Social Entitlement Chamber) / Tribunal Ref: [CASE REF]

BETWEEN

[CLAIMANT NAME] / Appellant
-and-
Her Majesty’s Revenue and Customs / Respondent

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Reply for appellant- can this late appeal be admitted

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  1. This submission only addresses the preliminary issue of whether the Tribunal has the power to extend time and admit this appeal.

RELEVANT FACTS FOR THE LATE APPEAL ISSUE

  1. The decision of HMRC was issued on [INSERT DATE OF DECISION].
  2. The claimant’s appeal was received by HMRC on [INSERT DATE].
  3. The reasons the claimant did not file the appeal at an earlier date are as follows:
  4. [INSERT EXPLANATION FOR LATENESS]
  5. [CONTINUE AS NEEDED]
  6. This appeal is important to the claimant because:
  7. [EXPLAIN IMPORTANCE OF CASE TO CLAIMANT
  8. [CONTINUE AS NEEDED]
  9. The appeal has reasonable/strong prospects of success as set out in our submissions on the substantive issue [DELETE OR AMEND IF NO SUCH SUBMISSINONS MADE]

JI v HMRC- does not decide the question of whether in a tax credit case time can be extended

  1. In JI v HMRC (TC) [2013] UKUT 199 (AAC), Judge Rowland made an extensive obiter comment to the effect that in his view there is no power for the First-tier Tribunal to extend the time for appealing in a tax credit case.
  2. It can be seen that the comments of the Upper Tribunal in JI v HMRC are obiter and not binding on the tribunal dealing with the present case from the following:
  3. At paragraph 47, the Judge explains that HMRC regard the last appealable decision as having been sent to the claimant on 08 December 2009 and the appeal as having been received on 15 March 2011:

47.If, as HMRC considers is the position, the last appealable decision in this case was sent to the Appellant on 8 December 2009 and his appeal was not received by HMRC until 15 March 2011, it seems at first sight that the appeal to the First-tier Tribunal must have been out of time and that the present appeal should be dismissed. However, there are two contrary arguments, which are variations of points made by the Appellant.

8.2.Neither of the “contrary arguments” the Judge referred to were ones where the facts would have meant the appeal was outside the 30 day time limit but within the potential “long stop” time-limit of 30 days plus 12 months. This is clear from the following:

8.2.1.The Judge explained the first of the contrary arguments at paragraph 48. This argument was effectively that the decision under appeal had not been notified at all and therefore the appeal was in time. The Judge rejected that argument:

48.The first argument is that notice of the decision of 8 December 2009 may have been effective only when the Appellant received the notice or a copy of it, which, he claims, was only after the appeal was brought. […] it is open to a person to prove that a decision given under the 2002 Act has not been received in the ordinary course of post so that time has not started to run. [….] However, even if he did not receive the original notice, the Appellant in this case was made well aware of the effect of the decision in the letter of 20 May 2010 and was also informed of a right of appeal and I do not consider that any lack of the “details” of the right of appeal required to be provided by section 23(2) has the effect that that letter does not amount to adequate notice of the decision in this particular case […].

8.2.2.The second potential contrary argument is explained at paragraph 49:

49.The second argument is that, as the Appellant puts it, the letter of 16 February 2011 was “at the end of a review process”. It seems to me to be arguable that, either by itself or taken with previous letters, that letter amounted to a decision under the Tax Credits (Official Error) Regulations 2003 (SI 2003/692), which were made under section 21 of the 2002 Act. The appeal would be effective as an appeal against such a decision and it may therefore not have been wrong after all to inform the Appellant that he had a right of appeal. The Appellant obviously thought that he was appealing against a decision issued on 16 February 2011 when he lodged his appeal.

8.2.3.So the second argument was effectively that the appeal, filed on 15/03/2011 (see para 47 cited above), was against a decision of 16/02/2011 (ie it was therefore in time). The Judge has reserved this argument as it raises the question of whether there is a right of appeal in tax credits cases against a refusal to revise for official error (see paragraph 50 on that point, and paragraph 58 in which the Judge explains he is reserving that issue for further decision). What is important though, for our purposes of showing that the Upper Tribunal has not ruled in a binding way on the question of whether time can be extended to admit a late appeal in a tax credit case, is that this second argument is about whether there was an in time appeal.

8.3.It is clear therefore that, on the facts of JI v HMRC, the issue of whether time could be extended to admit a late appeal did not arise. Consequently, what the Upper Tribunal had to say on this issue is not binding.

JI v HMRC- the Upper Tribunal’s reasons for saying there was no power to extend time to appeal in a tax credit case

  1. The reason why, in the view of the Upper Tribunal, time cannot be extended so as to admit a late appeal in a tax credit case are complicated but can be summarised as set out below.
  2. The time limit for appeals in tax credit cases was set as 30 days in section 39(1) of the Tax Credits Act 2002 (“TCA 2002”).
  3. The power of the, then, appeal tribunal to extend time arose in a complicated way: it will help to set out the original position and how it changed.

The original position

  1. Section 63(8) of the TCA 2002 allowed for the application of certain provisions of the Social Security Act 1998 (“SSA 1998”) to tax credit appeals. These included section 12(7) SSA 1998 which allowed for the making of regulations as to the time within which an appeal had to be brought.
  2. S. 12(7) SSA 1998 was thus used to make the Tax Credits (Appeals) (No. 2) Regulations 2002 (SI 2002 No. 3196) (“Appeals No. 2 Regs”). These provided, at reg 5 for late appeals- in particular reg 5(4) allowed for a panel member of the appeal tribunal to extend time:

Late appeals

5.—(1) The time within which an appeal must be brought may be extended where the conditions specified in paragraphs (2) to (8) are satisfied, but no appeal shall in any event be brought more than one year after the expiration of the last day for appealing under section 39(1) of the 2002 Act.

(2) An application for an extension of time under this regulation shall be made in accordance with regulation 6 and shall be determined by a legally qualified panel member, except that where the Board consider that the conditions in paragraphs (4)(b) to (8) are satisfied, the Board may grant the application.

(3) An application under this regulation shall contain particulars of the grounds on which the extension of time is sought, including details of any relevant special circumstances for the purposes of paragraph (4).

(4) An application for an extension of time shall not be granted unless—

(a)the panel member is satisfied that, if the application is granted, there are reasonable prospects that the appeal will be successful; or

(b)the panel member is, or the Board are, satisfied that it is in the interests of justice for the application to be granted.

(5) For the purposes of paragraph (4) it is not in the interests of justice to grant an application unless the panel member is, or the Board are, as the case may be, satisfied that—

(a)the special circumstances specified in paragraph (6) are relevant to the application; or

(b)some other special circumstances exist which are wholly exceptional and relevant to the application,

and as a result of those special circumstances, it was not practicable for the appeal to be made within the time limit specified in section 39(1) of the 2002 Act.

(6) For the purposes of paragraph (5)(a), the special circumstances are that—

(a)the applicant or a partner or dependant of the applicant has died or suffered serious illness;

(b)the applicant is not resident in the United Kingdom; or

(c)normal postal services were disrupted.

(7) In determining whether it is in the interests of justice to grant the application, regard shall be had to the principle that the greater the amount of time that has elapsed between the expiration of the time within which the appeal is to be brought under section 39(1) of the 2002 Act and the making of the application for an extension of time, the more compelling should be the special circumstances on which the application is based.

(8) In determining whether it is in the interests of justice to grant an application, no account shall be taken of the following—

(a)that the applicant or any person acting for him was unaware of or misunderstood the law applicable to his case (including ignorance or misunderstanding of the time limit imposed by section 39(1) of the 2002 Act); or

(b)that a Commissioner or a court has taken a different view of the law from that previously understood and applied.

(9) An application under this regulation for an extension of time which has been refused may not be renewed.

(10) The panel member who determines an application under this regulation shall record a summary of his decision in such written form as has been approved by the President.

(11) As soon as practicable after the decision is made a copy of the decision shall be sent or given to every party to the proceedings.

  1. Panel member was defined in Reg 1:

“legally qualified panel member” means a panel member who satisfies the requirements of paragraph 1 of Schedule 3 to the Decisions and Appeals Regulations;

Changes when the Tribunal Courts and Enforcement Act 2007 transferred the functions of appeal tribunals to the First-tier Tribunal

  1. From 03/11/2008, the Appeals No. 2 Regs were amended by the Tribunals, Courts and Enforcement Act 2007 (Transitional and Consequential Provisions) Order 2008 (SI 2008 No. 2683). Article 6 applied the amendments in Schedule 1. Paragraphs 208 and 209 of the Schedule are relevant:

208. In regulation 4 (time within which appeal is to be brought) for “a legally qualified panel member” substitute “the First-tier Tribunal”.

209. In regulation 5 (late appeals)—

(a)in paragraph (1)—

(i)for “The time within which an appeal must be brought may be extended” substitute “The Board may treat a late appeal as made in time”; and

(ii)for “(2)” substitute “(4)”;

(b)omit paragraphs (2) and (3);

(c)for paragraph (4) substitute—

“(4) An appeal may be treated as made in time if the Board is satisfied that it is in the interests of justice.”;

(d)in paragraph (5)—

(i)for “grant the application unless the panel member is, or the Board are, as the case may be,” substitute “treat the appeal as made in time unless the Board are”; and

(ii)in sub-paragraphs (a) and (b) omit “to the application”;

(e)in paragraph (6) for “applicant” substitute “appellant”;

(f)in paragraph (7)—

(i)for “grant an application” substitute “treat the appeal as made in time”; and

(ii)for the words “making of the application” to the end substitute “submission of the notice of appeal, the more compelling should be the special circumstances.”;

(g)in paragraph (8)—

(i)for “grant an application” substitute “treat the appeal as made in time”; and

(ii)in sub-paragraph (b) for “a Commissioner” substitute “the Upper Tribunal”; and

(h)omit paragraphs (9) to (11).

210. Omit regulations 6, 7 and 9 to 27 (procedure on appeal).

  1. The definition of legally qualified panel member was omitted by para 205.
  2. The intention here appears to have been that the Tribunal Procedure Committee would make rules as to late appeals by powers given to it in the Tribunals, Courts and Enforcement Act 2007. Thus para 209 removed all references to the appeal tribunal extending time and did not replace them with references to the First-tier Tribunal doing so.
  3. The difficulty is that the Tribunal Procedure Committee could not make such rules- indeed they did not. As the Judge found:

23.Until this case raised the issue, HMRC and the First-tier Tribunal clearly believed that time could be extended under the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685). However, the provision in the rules that permits time to be extended in all other cases in the Social Entitlement Chamber (subject to a maximum extension of one year in social security and child support cases due to the effect of rule 23(5) and (8), which were the provisions mentioned by the First-tier Tribunal), is rule 5(3)(a), which provides that the First-tier Tribunal may –

“extend or shorten the time for complying with any rule, practice direction or direction”.

24.That does not permit the extension or shortening of the time for complying with a provision in primary legislation. It could not do so. Tribunal Procedure Rules cannot permit an extension or shortening of the time for complying with a provision in primary legislation unless there is a specific enabling provision in primary legislation permitting such a rule (Mucelli v Government of Albania [2009] UKHL 2; [2009] 1 W.L.R 287). There is no such provision in primary legislation relevant to the present case.

  1. It should be noted, that section 63(8) (the enabling provision under which the Appeals No. 2 Regs had been made in as much as it allowed section 12(7) SSA 1998 to apply to tax credits) was also amended: Article 191 of the Transfer of Tribunal Functions Order 2008 (SI 2008 No. 2833) ensured that the section now applied to First-tier and Upper Tribunals rather than to the appeal tribunal and the Commissioners.
  2. Thus, from this point onwards, on the Judge’s analysis there was no power for the First-tier Tribunal to extend time.

Further changes made in 2009

  1. From 01/04/2009 the situation was made even more complex. The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (SI 2009 No. 56) amended the TCA 2002. Section 63(8) now had no application outside of Northern Ireland.
  2. Para 316 of the Schedule to the Order is as follows:

316.—(1) Section 63 (tax credit appeals etc: temporary modifications)(153) is amended as follows.

(2) For subsection (2) substitute—

“(2) Except in the case of an appeal against an employer penalty, an appeal under section 38 is to—

(a)in Great Britain, the First-tier Tribunal; or

(b)in Northern Ireland, the appeal tribunal;

and in either case section 39(6) shall not apply.”.

(3) For subsection (3) substitute—

“(3) The function of giving a direction under section 19(10) is a function of—

(a)in Great Britain, the First-tier Tribunal; or

(b)in Northern Ireland, the appeal tribunal;

and in either case the relevant provisions of Part 5 of the Taxes Management Act 1970 shall not apply.”.

(4) For subsection (4) substitute—

“(4) In Northern Ireland, except in the case of an employer information penalty, proceedings under paragraph 3 of Schedule 2 are by way of information in writing, made to the appeal tribunal (rather than to the tribunal), and upon summons issued by them to the defendant to appear before them at a time and place stated in the summons; and they must hear and decide each case in a summary way.”.

(5) In subsection (5)—

(a)in paragraph (a)—

(i)for “General Commissioners or Special Commissioners in sections 19(10) and 39(5)” substitute “tribunal in section 19(10)”;

(ii)for “appropriate tribunal” substitute “appeal tribunal”;

(iii)omit “and”; and

(b)omit paragraph (b).

(6) For subsection (6) substitute—

“(6) In Northern Ireland, an appeal under paragraph 2(2) or 4(1) of Schedule 2 from a decision of, or against the determination of a penalty by, the appeal tribunal lies to the Northern Ireland Social Security Commissioner (rather than to the Upper Tribunal).”.

(7) In subsection (7) for “to the High Court and the Court of Session are to the Upper Tribunal or a Northern Ireland Social Security Commissioner” substitute “to the Upper Tribunal are to the Northern Ireland Social Security Commissioner”.

(8) In subsection (8) for “appropriate tribunal or lie to the Upper Tribunal or” substitute “appeal tribunal or lie to”.

(9) Omit subsection (9).

(10) For subsection (10) substitute—

“(10) “Appeal tribunal” means an appeal tribunal constituted under Chapter 1 of Part 2 of the Social Security (Northern Ireland) Order 1998.”.

(11) After subsection (13) insert—

“(14) “tribunal” (other than in the expression “appeal tribunal”) shall have the meaning in section 47C of the Taxes Management Act 1970.”.

  1. At this point, this means that not only was there, on the face of things no power to extend time in secondary legislation, in GB there was no primary legislation allowing the making of such regulations.

2012 Changes

  1. The Revenue and Customs Appeal Order 2012 (SI 2012 No. 553) sought to undo some other unforeseen consequences of the 2009 Regulations (in particular restoring the power of HMRC to settle cases under the Taxes Management Act 1970).
  2. Article 2 restored the phrase “First-tier Tribunal” to section 63(8) of the TCA 2002:

Amendment of the Tax Credits Act 2002

2.—(1) Amend section 63 of the Tax Credits Act 2002 (tax credits appeals etc: temporary modifications)(1) as follows.

(2) In subsections (5) and (8) before “the appeal tribunal” insert “the First-tier Tribunal or”.

  1. Judge Rowland decides that this did not have the effect of restoring the Appeals No. 2 Regs:

46. It may have been thought that the Order would have the effect of reviving the 2002 Appeals Regulations, insofar as they had lapsed, and therefore also the 2002 Appeals (No.2) Regulations, although that would not be consistent with the understanding that the 2002 Appeals Regulations had applied only in Northern Ireland before they lapsed due to the amendments made to them in 2008. In any event, the 2012 Order had to be retrospective to have the effect of reviving subordinate legislation that had ceased to be valid and nothing on the face of the Order indicates that it is to have such retrospective effect. There are well-established forms of words used when it is intended that subordinate legislation that has not been valid is to be treated as though it has always been valid. It is clear that the Committee considering the Order anticipated that its effect would be the application of section 54 to tax credit appeals in Great Britain but there is nothing to indicate that it thought that that would be achieved without new regulations being made under the power being amended. Moreover, as I have already observed, the amendment does not restore the previous reference to the Upper Tribunal and it is therefore not obvious that it was intended that all the subordinate legislation previously in force should be revived. I conclude that the 2012 Order does not have retrospective effect. Therefore, not only does section 54 still not apply to tax credit cases in Great Britain, but it also remains the position that neither HMRC nor the First-tier Tribunal has the power to extend the time limit in section 39(1) of the 2002 Act insofar as it applies to appeals in Great Britain.