The appellant Yispoel Dreyfus, director of property lettings agency Triplets Estates Limited, launched an appeal against HMRC’s closure notice in 2023 but was 13 days late in doing so. HMRC and the tribunal allowed the appeal to go ahead despite the late appeal.

Additionally, Dreyfus filed his skeleton argument two days late, and then HMRC attempted to get the appeal struck out, but this was thrown about by the tribunal and the appeal went ahead.

Dreyfus did not appear at the tribunal personally as he was ‘bedbound’ at the time and instead his representative, Elliot Hirsch, co-founder and CEO of Tourbillon Tax appeared, whom judge Alastair Rankin described as ‘unconvincing’.

On 22 June 2021, Dreyfus completed the purchase of 60a Cranbourne Gardens in north west London for £1,8m, with purchaser agreeing to a ‘key undertaking’ document for a self-contained unit at the property on 7 June 2021, the day of the contract exchange.

A garage attached to the property is the separate property in question, which has an internal door from the garage into the main house.

The stamp duty land tax (SDLT) return was completed on the same day under a residential sale, with multiple dwellings relief claimed, reducing the bill to £40,000.

HMRC issued its notice of inquiry into this on 10 March 2022 under Paragraph 12, Schedule 10 of the Finance Act 2003, with the appellant confirming receipt of this on 17 May 2022.

A closure notice of £114,750 was issued to the appellant on 16 September 2022 under paragraph 23, Schedule 10 of the Finance Act 2003 concluding the appellant owed an extra £74,750. After some communication back and forth Dreyfus appealed the notice in March 2023.

The annex was to be built and intended to be ‘proper and lettable’ according to Dreyfus. However, evidence of this was not supplied in the witness statement of Dreyfus, with no separate address, utility bills, or council tax, it was not even up to the standard regulations to be rented out legally.

Dreyfus claimed that two separate properties were on the plot, with all amenities for living, including bedrooms, a kitchen, bathroom and living areas. Each building also had its own supply of electricity and gas according to the appellant, although there was no evidence of this.

The water supply to the annex came from the downstairs toilet of the main property, with the judge acknowledging this by saying: “The appellant would not be pleased if a tenant decided to leave the taps running all night and the electric radiator running 24 hours a day all year round”.

Judge Ranking concluded: “In reaching the conclusion that the annex is not usable as a single dwelling the Tribunal is following the guidance given by the Upper Tribunal in Ladson Preston and Fiander and Brower and also the First-tier decision in Ralph.’

The appeal was dismissed leaving Dreyfus liable to pay the full £144,750 SDLT bill.