11 October 2022
The taxpayer, Mr Dominic Kiernander – a dentist living in the British Virgin Islands (BVI), suffered with his mental health for several years and this was heightened during the pandemic.
In 2018 HMRC raised assessments upon the taxpayer for nine tax years. The appeals process was followed by Mr Kiernander and his advisers, leading to a statutory review being undertaken by HMRC in late August 2020. A Notice of Appeal was submitted to HMRC in December 2020 (in time), but this was not deemed valid because of the omission of certain documents. HMRC requested that the taxpayer resubmit a valid Notice of Appeal.
On 6 August 2021 (around seven months after the submission of the original appeal) the taxpayer’s advisers submitted an out of time Notice of Appeal, citing ‘restricted interactions with advisors, disruptions to inter-staff communications, office closures and post not being collected for long periods’ as the reasons for the late submission.
What was not included but was stated in the taxpayer’s witness statement in the Tribunal, was that Mr Kiernan had mental health difficulties which meant that in his worst days he was unable to even open letters from HMRC, let alone read them. Further, the postal system to the BVI was very slow, especially during the pandemic, and as stated in his cross-examination he was working in excess of 50-hour weeks during the pandemic.
In this case the judge found that upon the balance of all facts, there was still an absence of evidence to demonstrate specific circumstances or detailed effects of the pandemic which gave rise to the delay. It is unfortunate that, whilst the taxpayer may have been particularly impacted by the pandemic in several ways, it is not enough to simply ‘be impacted’ by the pandemic. Taxpayers must provide evidence, both to HMRC and to the courts, on how they have been negatively impacted by the pandemic.
A late appeal by a taxpayer will only be successful if it can be demonstrated that there is a reasonable excuse for doing so. This decision shows the importance of a taxpayer being able to evidence the specific facts and circumstances of their reasonable excuse even in the case of the disruption caused by a global pandemic.