Tax appeals, disputes and complaints Appealing against tax enquiries
HMRC may launch a formal enquiry into the amount of tax you pay.
If you disagree with the enquiry or a decision HMRC has made you must appeal in writing, usually within 30 days of receiving the decision (the time limit will be stated in the note sent with the decision).
Write to the address on the notice of decision, stating that you wish to appeal, and that you wish HMRC to look at their decision again under the process known as internal review, or alternatively that you wish to take the matter to the first-tier Tribunal.
If your dispute cannot be resolved by reaching an agreement, HMRC has introduced an internal review process.
This means that if you disagree with the outcome of your appeal, you have the right to ask for an internal review of HMRC’s decision before deciding whether to send your appeal to a tribunal.
The review will be carried out by a ‘specialist reviewer’ not associated with the management chain of the original decision maker and should be completed within 45 days. You then have 30 days to ask the tribunal to hear your case.
On 1 April 2009, a new system for dealing with disputes that HMRC cannot resolve was implemented.
The commissioners who used to hear disputes were replaced by first-tier and second-tier tribunals.
The tribunal is administered by the Tribunals Service, which is part of the Ministry of Justice. However, as before, HMRC will consider your appeal first and try to sort the problem out – most cases are resolved this way rather than through internal review or further appeal to the tribunal.
However, you can also appeal if an enquiry is ongoing, by asking the first-tier tribunal for a direction that HMRC bring the enquiry to a close. This can be done if, for example, HMRC is dragging the process out, and may act as a spur to HMRC to finish the enquiry quickly, or explain why they wish to continue with it.
If you still can’t agree
If you and HMRC still can’t agree, your case can be heard by a specialist tax chamber within the first and second-tier tribunals system. Appeals will be classified according to their complexity and different rules will apply.
For straightforward appeals, there should be a paper track. In this instance the tribunal will make a decision based on written representations from both parties. The first and second tier tribunals use this same process for dealing with appeals, however all but the most complex cases will be heard by the first tier tribunal.
You don’t have to appeal personally – a tax specialist or lawyer, for example, can appeal on your behalf.
If your income is around £15,000 a year or less and you can’t afford to pay someone to represent you, you might be able to get help from TaxAid or, if you are also a pensioner, TaxHelp for Older People.
Taking your case further
If you have chosen to go down HMRC’s internal review procedure, you can appeal against the decision of the reviewing officer to the first-tier tribunal.
Should you be unhappy with the decision of a first-tier tribunal you may be able to appeal to the second-tier tribunal, but usually only if the appeal is on a point of law. Appealing a second-tier tribunal decision can be done by going to the Court of Appeal, but again, it must be on a point of law.
If you go to first-tier tribunal, each side bears its own costs unless one side has behaved wholly unreasonably. The situation is more fluid in the second-tier tribunal – generally an appellant opts for a costs or no costs regime.
If you are considering an appeal, it makes sense to get professional advice – for example from a solicitor. This only applies to tax appeals – it does not apply to tax credit appeals.
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