Case: Second appeal against personal liability notice struck out

In Khan TC 10029, the FTT struck out a director’s second appeal against a personal liability notice (PLN) after his first appeal was withdrawn. The company had been penalised and assessed for VAT; the director appealed the PLN, but when the company went into liquidation, his agent withdrew all three appeals. Mr Khan later said he had not understood that withdrawing the PLN appeal would mean the notice was treated as upheld and the debt survived liquidation.

The Tribunal applied VATA 1994, s. 85(4), which provides that if an appellant withdraws an appeal and HMRC do not object within 30 days, the decision under appeal is “upheld without variation”. On that basis, the first appeal was treated as determined and a second appeal was not possible. HMRC’s strike‑out application was granted.

The case highlights the importance of understanding the consequences of withdrawing an appeal, particularly where a PLN is involved. Even where a director feels poorly advised, withdrawal can permanently bar further challenge to the underlying penalty and debt.