HMRC has made a major change in debt collected practice in appeal cases. In direct tax cases, when a taxpayer appeals to the Tax Tribunal against an assessment or closure notice, HMRC used to postpone the payment of the disputed tax pending the outcome of the litigation.
If the Tax Tribunal decides the case in HMRC’s favour, the law entitles the taxman to collect the disputed tax at that point – even if the taxpayer is pursuing an appeal to the Upper Tribunal or the higher Courts. In practice HMRC have not enforced collection until all rights of appeal have been exhausted. From 1st April the taxman will normally want the tax paid following a win at the Tax Tribunal or a Higher Court. If it ultimately loses the case, HMRC will then refund the tax. This puts Income Tax, Capital Gains Tax and Corporate Tax on the same footing as the more aggressive VAT, where the general rule was always that the VAT has to be paid upfront except in cases of hardship. Nevertheless, the ability to postpone tax pending a hearing by the Tribunal, still puts the taxpayer in a fairly advantageous position in terms of litigating direct tax cases.
Do I need specialist help with my tax appeal?
The Tax Tribunal is an independent body which adjudicates in disputes with HMRC. Taking an appeal to the Tax Tribunal can be a highly effective way of resolving disputes with HMRC. However, the taxman uses specialist ‘Appeals’ teams to lead its cases at Tribunal.
Lynam Tax Dispute Experts have decades of experience in handling contentious tax appeals and can assist taxpayers and their accountants with the process; in order to achieve the optimum results.
If you need help with a difficult tax dispute or a contentious tax appeal call Paul Lynam now for a confidential and no obligation discussion on: 0845 643 9997.