Sometimes disputes can arise after an appealable decision from HMRC, such as when they raise an assessment, conclude an enquiry, or issue a penalty decision.
But going head-to-head with HMRC can feel like venturing into uncharted territory if you’re unfamiliar with the processes involved. Fortunately, there are various ways to manage HMRC disputes effectively whether you’re an individual taxpayer or business owner.
At Lawhive, our network of expert money, tax, and debt lawyers specialise in guiding clients through HMRC disputes, providing expert advice and representation tailored to your specific circumstances.
So, if you are caught up in an HMRC dispute, contact us today for a free case evaluation and quote from our legal assessment team.
When can you dispute a decision from HMRC?
You can challenge a decision from HMRC relating to a:
Tax bill
Tax relief claim
Request for information
Penalties (i.e. for late payment of taxes or a late tax return)
When HMRC makes a decision, they’ll send you a letter explaining it. This letter will also tell you if you have the right to appeal.
When can you ask HMRC to cancel the tax you owe?
You may be able to request HMRC cancel the tax you owe if you believe that HMRC didn’t take action based on information provided by you, your employer, or the Department for Work and Pensions (DWP), and the tax demand is based on incorrect information.
Can you appeal against a tax decision from HMRC?
You may have the right to appeal against a tax decision from HMRC. They’ll tell you if you can.
How you appeal a tax decision from HMRC depends on whether it relates to direct or indirect tax.
Can you appeal against HMRC penalties?
HMRC usually impose penalties if they assess a taxpayer’s behaviour as careless or deliberate, with the latter usually coming with significantly heavier penalties.
You can appeal HMRC penalties in the same way as tax decisions. In penalty cases, the burden of proof is on HMRC to prove deliberate or careless behaviour.
If you have received a penalty for deliberate or careless behaviour, it’s a good idea to get advice to better understand your situation and the strength of your appeal.
What is a closure notice?
When HMRC finishes a tax investigation, they issue a closure notice. If you disagree with the findings of the closure notice, you have 30 days to appeal to the HMRC investigator, outlining the grounds for your appeals and requesting a postponement of the disputed tax payment.
How to appeal a direct tax decision
Direct tax includes things like income tax, PAYE, corporation tax, Capital Gains Tax, National Insurance Contributions, and Inheritance tax.
If you want to appeal a decision on direct tax, your decision letter will provide instructions on how to do so and the deadline, which is usually within 30 days.
Typically, this involves using the appeal form provided with your decision letter. Alternatively, you can write to HMRC at the address mentioned in the letter or the relevant HMRC office.
When you appeal a direct tax decision with HMRC, your case will be reviewed by a case worker. If the decision remains unchanged, you can have your case reviewed by someone not involved in the initial decision and you may receive a review offer. You can accept this or appeal to the tax tribunal.
How to appeal an indirect tax decision
Indirect tax includes VAT, excise duty, customs duty, and environmental taxes.
If you want to appeal an indirect tax decision, HMRC will offer a review in your decision letter. You can accept the review or appeal to the tax tribunal within 30 days from the decision date.
It’s important to note that if your case involves direct tax, you have to appeal to HMRC first before taking the matter to the tax tribunal.
What is an independent internal review?
When you’re in a dispute with HMRC, an independent internal review is often the first step in resolving the issue. As HMRC is required to respond to requests for an internal review within specific timeframes, it can be a relatively fast way of resolving HMRC disputes.
During the process, an HMRC officer who wasn’t part of the original decision will review your case and decide whether the original decision aligns with the law and HMRC guidelines.
Alternative dispute resolution for HMRC disputes
If negotiations don’t settle an HMRC dispute, Alternative Dispute Resolution might be worth considering. It’s often a quicker and less expensive route compared with traditional litigation and can be used alongside tribunal applications.
What is the First-Tier Tax Tribunal?
The first-tier tax tribunal operates independently of HMRC and falls under the administration of the Tribunals Service. Its role is to assess appeals based on the facts presented and the legal arguments from both taxpayers and HMRC.
If HMRC disputes can’t be resolved through an independent review or ADR, you can take an appeal to the first-tier tax tribunal. However, appealing to the tribunal can be a lengthy process with additional costs involved. What’s more, there’s no guarantee that your appeal will be successful. Therefore, it’s important to weigh the pros and cons carefully.
Our network of money, tax, and debt lawyers can help you in making this decision.
Contact us today for a free case evaluation with our legal assessment specialists to find out more.
How to appeal to the first-tier tax tribunal
To appeal to the tribunal, you need to write to the Tribunals Service within 30 days of receiving the decision later from HMRC. Or, if you chose to have an independent review, 30 days from receiving the review conclusions letter.
You can do this through the appeal form on the Tribunals Service website or contact the Tribunals Service to request a copy of the form.
When the Tribunals Service receives your appeal form, they’ll either schedule a hearing to resolve your HMRC dispute or, in simpler cases, make a decision based on information provided by both parties without a hearing.