An unsuccessful appeal against a decision made by HMRC is not necessarily the end of the road. If you strongly disagree with a decision HMRC has made, you could consider taking the case to the Tax Tribunal.

However, before taking your appeal to the next stage, it’s ESSENTIAL you understand the risks and potential costs involved. Be aware HMRC always have the option to take legal action against and ask for court hearing to have the company wound up

In 2014, of 455 appeals taken to a tax tribunal, only 113 were successful. Clearly, tax tribunal cases are more likely to be won by HMRC than by the taxpayer. If you pursue a case all the way to a tribunal and lose, it is possible you’ll spend more money fighting the case than the actual tax in dispute.

Taxpayers do not have to pay for the cost of the tribunal itself, but as costs are not awarded, you will have to pay for any assistance you need. That’s not to say it’s not worth fighting a case all the way, but it is worth seeking advice about the strength of your case.

Have you tried Alternative Dispute Resolution (ADR)?

Before taking your appeal to a tribunal, we highly recommend you consider Alternative Dispute Resolution (ADR) first, as this does not affect your right to appeal. If you feel you are no longer making progress in your dealings with HMRC, an ADR allows you to work with an individual who’s not been involved in the case. They act as a neutral, third party moderator, working with you and the HMRC officer to seek a resolution.

An ADR can be particularly useful if you and HMRC have different versions of the story, or if communication has broken down completely. The moderator will help you to focus on the areas that need to be resolved, and re-establish communication links between the two parties.

What is the Tax Tribunal process?

An ADR is not suitable in all cases and may prove to be unsuccessful, leaving you with little choice but to take your case to a tribunal. Once your case is in the Tax Tribunal system, there are very formal processes you must follow. The tribunal itself will take the lead, issuing directions to you and HMRC and setting out deadlines that must be followed. An agreement can be reached to change the deadlines, but this must be done with the approval of all parties.

Default Paper and Basic appeals

Your Tax Tribunal is most likely to be completed as a default paper appeal or as a basic appeal where your evidence is presented in person. In the case of a paper-based appeal, the process is as follows:

• The tribunal will inform HMRC of the appeal if it’s not already aware;
• The tax tribunal will give HMRC 42 days to provide a written statement of its case. This will also be sent to you and your adviser;
• You then have 30 day to respond to HMRC in a statement that must be sent to the Tax Tribunal and HMRC. This is your opportunity to put forward your own points and argue those made by HMRC;
• Both the statements will then be reviewed by a tribunal judge who will provide you and HMRC with a decision in writing.

In the case of a basic appeal to the Tax Tribunal, an informal hearing will be arranged where you can explain your case against the HMRC decision. HMRC will also present its case. The process will be conducted verbally and the Tax Tribunals judgement will usually be given at the end of the hearing.

How can we help?

At Company Debt, we have vast experience representing clients and finding an effective resolution with HMRC. We are also skilled at negotiating with HMRC and may be able to resolve the matter without going to a Tax Tribunal. For a free, no-obligation consultation about your situation, please get in touch with our team today.