Whilst HMRC rules on and regulates all matters relating to you or your company’s tax liability in the UK, it does make mistakes and accordingly there is a formal process for appealing any such mistakes, whether it be a tax assessment or in respect of fines and reliefs sought.Our tax dispute team are experts in this area.
- where HMRC have made a decision as regards taxes due from a business or company, their decision notice will provide details of how to appeal such a decision.
- in the event an appeal is made, the tax liability itself will usually be postponed until conclusion of the appeal process.
The decision notice will usually provide for a specific time limit to appeal (usually 30 days) and if the appeal is not filed within that period then you may lose these rights. Accordingly, it is vital to immediately seek professional advice upon receiving a tax decision notice.
Before any formal steps are taken in respect of a HMRC decision, we would always recommending seeking to negotiate as HMRC will always listen to any reasonable requests, for example in respect of Time to Pay arrangements.
However if you are unable to engage HMRC, and provided you file your appeal within the required period (or any extension granted), then HMRC will usually arrange for another tax officer to conduct a review of the decision made as to your tax liability, claim for relief or the decision to impose a penalty.
This provides a degree of independence in respect of the matter itself and the decision-making process. Upon this review being carried out, your decision may be reversed, adjusted or not amended and you should expect to receive (according to HMRC) a decision within 45 days.
If the review is unsatisfactory or you wish to continue the appeal for any other reason, then the next stage is formal proceedings within the Tax Tribunal. The Tax Tribunal, whilst part of HMRC, is independent and acts as a specialist court devoted to dealing with tax disputes.
- a Tax Tribunal will not be bias to HMRC’s case and indeed we find a lot of decisions are made in conflict with HMRC’s position;
- however, it is nevertheless the case that all such decisions are made on the basis of the law, and so a favourable outcome should not necessarily be expected.
However, the Tax Tribunal is not a free service and you will require your own professional advice and assistance, the cost of which you cannot reclaim even if successful, in a similar manner to civil litigation proceedings.
An appeal can be made on various grounds, including that tax has been incorrectly assessed, a decision has been made to impose a tax liability for a disguised remuneration tax scheme and in respect of payment arrangements.
If you have sought a payment arrangement to assist in repaying your tax liabilities, and this has been denied or your proposal not accepted, you can appeal to the Tax Tribunal to reconsider this, although you will have to factor in the associated appeal costs.
Tax tribunal hearing
The appeal process for a tax tribunal hearing of your appeal works in a similar manner to general court hearings. There are specific documents that are required to be filed together with copies of the correspondence exchanged to date and identification documents.
- once the required documents and details of your case are filed, the decision may be considered on paper or at a hearing.
- if at a hearing, this will be a public hearing of the First Tier Tribunal and any member of the public can attend and watch the proceedings – for this reason a taxpayer may have concerns as to the publicity of their private information, in which case a private hearing may (in certain circumstances) be possible.
- the hearing itself will normally be before a panel consisting of tax experts or a judge (sometimes both) and, as with conventional civil litigation, a decision may be made on the day or reserved to be written up and handed down at a later date.
Once received, as with any other litigation proceedings, you can seek to either set aside the decision or seek permission to appeal it to a higher court (the Upper Tribunal).
At Francis Wilks & Jones we have extensive experience of negotiating tax liabilities with HMRC and can advise and assist with regard to tax appeals. Contact one of our expert tax dispute team today – don’t settle for second best.