Upper Tribunal Decision Reinforces the Importance of Acting Promptly

The Upper Tribunal’s decision in Pawar v HM Revenue & Customs [2025] UKUT 309 (TCC) provides a clear and sobering reminder of the importance of statutory deadlines in tax disputes, particularly where personal liability notices are concerned. In this case, Mr Pawar, a director and shareholder of First Stop Wholesale Ltd, was issued with a Personal Liability Notice by HMRC for over £874,000 in VAT penalties. He attempted to lodge an appeal almost three years after the statutory 30-day deadline. Unsurprisingly, the First-tier Tribunal refused to admit the late appeal, and the Upper Tribunal has now upheld that refusal.

The Tribunal reaffirmed the three-stage test from Martland v HMRC: the length and significance of the delay; the reasons for it; and the balance of all the circumstances, including the strength of the case and prejudice to the parties. It also revisited the principle from Katib, that clients are generally responsible for their advisers’ errors, save in exceptional circumstances. The judgment further highlighted the recent clarification in Medpro UT, namely that statutory time limits should not automatically outweigh other factors, but that tribunals must give fair weight to all the circumstances of the case.

On the facts, the delay was simply too long, and the explanations offered - largely resting on the failings of advisers were inadequate. While the Tribunal recognised the potential prejudice to Mr Pawar, including the risk of bankruptcy, it concluded that there was insufficient justification for the failure to act within the prescribed timeframe. The message is clear: while the merits of a case and issues of hardship can weigh in the balance, they do not excuse prolonged inaction.

For practitioners, the implications are significant. Clients must be advised in the strongest terms that appeal deadlines are strict and not easily displaced, even where advisers fall short. Documentation of advice and proactive monitoring of appeal rights are essential safeguards. The judgment also illustrates that reliance on arguments of prejudice or adviser incompetence will rarely succeed unless supported by strong and timely evidence.

Ultimately, Pawar underscores that the discretion to admit late appeals is narrow, and the burden on the taxpayer to justify delay is a heavy one. It is a timely reminder for litigants and advisers alike: vigilance over statutory deadlines is not optional but fundamental to protecting rights of appeal.

Read the full case here;