If you have received a decision letter from HMRC in relation to a tax investigation it has conducted in respect of your tax affairs, you are likely wondering what your rights of appeal are and what your next steps should be. Our tax investigations and fraud lawyers would be happy to assist in this process.
Our tax investigation solicitors have vast experience in technical tax issues and in contentious tax matters, including tax tribunal proceedings. This means that we are equipped to deal with matters at any stage throughout the investigation process – from the opening of an investigation to the conclusion of the matter at the Tax Tribunal.
It is a common mistake of taxpayers to either ignore correspondence from HMRC until it is too late to effectively challenge a decision or to make a minor procedural error with the same effect. Your first step should be to request a review of the decision. It is common for HMRC to include an appeal form with their decision letter. Once you have requested a review, your file will be transferred to a review officer at HMRC, who will review your file in detail, including the reason for your appeal. The review officer will then issue a final decision letter, which will either reverse the earlier decision or uphold it.
Should the review uphold the original decision, we would strongly advise you to get in touch with our tax investigations law team to discuss your options.
We have set out some frequently asked questions below.
Q: How long do I have to appeal the original decision?
A: You usually have 30 days from receipt of the original decision or from the review decision to issue an appeal to HMRC.
Q: How long will it take to receive a final decision?
A: If you ask for a review, HMRC usually has 30 days from receipt of your request to say whether or not they agree with your view. HMRC may only take longer to respond if it is reasonable to do so and advise you of any delay in the process, in writing.
Q: What are my options if the review officer upholds the original decision?
A: You will have a deadline by which to refer your appeal to the First-tier Tax Tribunal. The deadline will depend on the type of tax for which the investigation was opened. The deadline is usually set out in HMRC’s final decision letter. We would advise lodging your appeal, if you are so minded, as soon as reasonably practicable upon receiving the final decision.
Q: If I make an appeal to the Tax Tribunal, what is my exposure to HMRC’s costs?
A: Generally speaking, you will not be expected to pay HMRC’s costs of the appeal unless the Tribunal considers that you have acted unreasonably. However, in some cases, HMRC will insist that you pay the amount of tax in dispute before the appeal proceedings may commence.
If you are unable to pay the full amount HMRC says is outstanding, you can make a Hardship Application to the Tribunal. A Hardship Application, in short, is based on the hardship paying the amount in dispute and allows for the sum to be deferred until the outcome of the Tribunal proceedings. Obviously, if you are successful at the Tribunal, you will not have to pay the sum HMRC averred was outstanding.
Q: How long will an appeal to the Tax Tribunal take?
A: There are many factors which will impact the speed at which tribunal proceedings will take to conclude and so it is difficult to put an exact timeframe on it. In our experience, tribunal proceedings can take between 6 and 12 months in straightforward matters and longer in complex matters.
Q: Is the First-tier Tax Tribunal’s decision final and binding?
A: Simply put, no. There are other avenues of appeal, including the Upper Tribunal, the Court of Appeal, and the Supreme Court. Our tax investigation lawyers can assist you with these avenues.
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