Appealing an HMRC decision
Appeals can be made against both direct and indirect tax.
Direct tax includes:
- Income tax;
- PAYE;
- Corporation tax;
- Capital Gains Tax
- National insurance contributions; and
- Inheritance tax and Stamp Duty Land Tax.
Indirect tax includes:
- VAT;
- Excise duty; and
- Customs Duty
Appeals against direct tax decisions must be made to HMRC before a notice of appeal can be made to the Tribunal. In respect of indirect tax appeals, an appeal can be made straight to the Tribunal but before appealing it is possible to request a statutory review.
A statutory review is a review by an HMRC officer who was not involved in the original decision and will reconsider the decision originally made by HMRC.
Once an appeal form has been submitted to the Tribunal and the appeal accepted it is also possible to apply to HMRC for alternative dispute resolution. Alternative dispute resolution is a formal mediation process for tax disputes which involves an independent mediation of the case by an HMRC facilitator. Please refer to [insert link to ADR article] for further information.
All appeals must be made within the strict time limits. In general, any indirect tax owed must be paid upfront unless a hardship application is submitted and accepted. A hardship application must demonstrate that payment of the disputed tax would cause the taxpayer to suffer financial hardship.
Each application must be considered on a case by case basis and will vary upon the amount of tax at stake and the cash flow position of the taxpayer in question.
Direct tax payments can be delayed until after the appeal has been decided without the need to submit a hardship application. Penalties do not have to be paid upfront when being appealed.
What to do if goods are seized
If Border Force or HMRC have seized goods, and refuse to return them or seek a payment prior to the release of them, the reasonableness of that decision can be appealed to the Tribunal. The appeal focuses on the reasonableness of the decision, and not the legality of the seizure.
How do I apply for a closure notice?
A closure notice can be applied for if HMRC has opened an enquiry for direct tax and the taxpayer wishes for it to be closed. A closure notice application cannot be made in respect of an indirect tax return
What actions can be taken if the NCA issues a decision?
The NCA can check a tax return instead of HMRC. Before an NCA decision may be appealed to the tribunal an appeal must first be made to the NCA.
How to appeal a WRA decision
Some WRA decisions about Land Transaction Tax and Landfill Disposals Tax can be appealed to the Tribunal. An appeal must be made within the time limits set out in the decision letter.
Usually, any tax owed to WRA must be paid upfront but a request can be made to delay payment until a decision about the appeal is made but interest may be due on any delayed payment. Before an appeal the WRA can be asked to change their decision.
What is the appeals process for all the different types of appeals?
An appeal to the tribunal can be submitted online, must be accompanied by a copy of the original notice or review conclusion letter and must be supported with reasons for the appeal.
Early specialist advice can help avoid protracted litigation by narrowing the issue and carefully drafting grounds of appeal. Instructing a specialist tax lawyer at an early stage brings a fresh pair of eyes to review your position.
Communications with your lawyer can benefit from the principle of legal privilege, which protects certain confidential documents from being disclosed to a third party, including HMRC, where these are prepared for the purpose of receiving legal advice or in the course of litigation.
How we can help
If you wish to receive any further information regarding appeals, please contact Tajinder Barring or Nina Basra, or see our tax investigations and litigation page for how we can help.
