For the first time since the introduction of income tax (as a “temporary measure”) in 1799, the government is now going to charge taxpayers in the if they want to appeal against an HMRC decision to the independent Tax Tribunal.
Following a consultation exercise, in which most of the concerns of the tax and accountancy profession have been dismissed, the government has decided to introduce charges for taking appeals to the Tax Tribunal as soon as practical.
When a taxpayer disagrees with a decision by HM Revenue and Customs they can apply for the case to be reconsidered internally, by another tax inspector, in a process known as Statutory Review. If they are still unhappy with that decision, the taxpayer can then make an appeal to the independent Tax Tribunals. The vast majority of tax appeals are heard by the First-Tier Tribunal (“FTT”), with only a very small number of the largest and most complex cases being heard by the Upper Tier Tribunal (“UTT”). Although taxpayers have to cover their own professional costs of taking an appeal, they do not currently have to make any payment to the Tribunal Service itself. That will all change shortly.
When a taxpayer makes an appeal the Tribunal Service carries out an initial triage exercise; putting the case into one of four categories: Paper, Basic, Standard, or Complex. “Paper” cases are very straightforward and are considered by the Tribunal judge based on a review of the copies of correspondence, and do not involve an actual court-style hearing. The vast majority of cases are categorised as “Standard”.
Once the charges are introduced there will be an initial fee for “issuing proceedings”: in other words, commencing the Tribunal’s administrative process. Many cases which start out on appeal are settled out of court, by the taxpayer and HMRC, without having to proceed to a formal court-style Tribunal hearing.
Once fees are introduced they will range as follows: Paper £0 – £50; Basic £50 – £250; Standard £200 – £700; Complex £200 – £1,200. The lower fee will apply where proceedings are issued but the case does not proceed to a full hearing. The higher fee will apply where proceedings are issued and the matter does end in a full court-style hearing before a Tribunal judge.
What does this mean for me?
If you have a tax enquiry, or some other form of dispute with HMRC, then in future it could cost you more trying to get matters resolved in your favour. It has always been best to be represented by experienced tax dispute professionals: who are able to negotiate suitable settlements with HMRC without taking the matter to Tribunal. It does leave open the option of having the matter reconsidered by way of Statutory Review without a fee being charged by HMRC or the courts. However, if you want to take your case to a full hearing at the Tribunal there will be these additional charges. This makes it all the more important that you are properly advised by experienced tax dispute professionals – who can properly evaluate your chances of success and, equally importantly, present your case skilfully and comprehensively at any subsequent Tribunal hearing: in order to maximise your chances of success.
How can the Lynam Tax Dispute Experts help me?
Lynam Tax Experts have prepared for many Tribunal hearings and the process has usually meant the taxman conceding before the formal meeting. We have also presented many cases very successfully at formal contentious hearings; and we are currently assisting a number of clients through the tax appeal processes. We will fight your corner tenaciously, but also with the subtlety and skill honed from 75 years’ real experience.
IF YOU NEED ADVICE AND HELP IN A CONTENTIOUS TAX DISPUTE CALL:
PAUL LYNAM : 0845 643 9997
ANDREW NUTBROWN : 0771 877 8710