Tax Appeals & Tribunals

Most tax enquiry issues are settled by negotiation and agreement. But when a taxpayer and HMRC cannot agree on an issue there are various appeals processes available to resolve matters: including the Tax Tribunal, Internal Review and Alternative Dispute Resolution.

Statutory Review

The so-called Statutory, or Internal Review is an HMRC led mechanism whereby another tax inspector, not previously involved with the case, can consider matters. A Statutory Review can be a very useful method of resolving a dispute, particularly where it seems that the tax investigator is misinterpreting the key facts, or applying the tax law incorrectly.

Tax Tribunal The First-Tier Tribunal

If tax enquiry is still not settled, then the next stage is the First-tier Tribunal (Tax Tribunal). The tribunal is independent of HMRC and has impartial judges hearing both sides. Decisions made in the tribunal are legally binding. Most disputes are dealt with in the First-tier Tribunal, and only if one of the parties (the taxpayer or HMRC) appeals against their decision will the case be heard by the Upper Tribunal. The disputes dealt with by the First-tier Tribunal will include:

• Appeals against penalties charged by HMRC.
• Appeals against amendments to returns or assessments made by HMRC.
• Technical disputes concerning the interpretation of tax legislation.
• Disputes over the facts in a tax enquiry ­ for example, is the cash found under the taxpayer’s mattress undeclared business takings?
• Applications to require HMRC to close down an enquiry.
• Appeals against HMRC’s requests for information on the grounds it is not ’reasonably required’, or it would be ’unduly onerous’ to have to produce it.

We will usually involve Tax Barristers for any enquiries proceeding to the tax tribunal.