Compliance with tax-related matters is one of main concerns of business people, and at the same time, one of the most complex aspects of running a business. In the United Kingdom, tax law and taxation requirements tend to change regularly, so it is always wise to entrust these matters to a professional with ample knowledge of the subject. However, it is also important to be familiar with certain basic aspects of business taxation in order to avoid unpleasant surprises. One of the most common scenarios for individuals and businesses is being subject to mistaken tax decisions. What can you do if this is your case? Below you will find all the necessary information.
About tax tribunals
If you or your company want to dispute a tax decision made by HM Revenue and Customs, you must be aware that the appeals procedure was modified in 2009. Up until then, tax disputes were dealt with by the VAT and Duties Tribunal. After 1 April 2009, a two-tier system of tax tribunals was introduced in an attempt to streamline procedures and simplify the handling of tax disputes. The tax tribunal’s jurisdiction is much wider that the one had by its predecessor, as tax tribunals have also come to replace the High Court and the role of General Commissioners in tax-related cases.
The two-tier system of modern tax tribunals is comprised of a First-Tier Tribunal, which in turn comprises six units, including the Tax Chamber; and the Tax and Chancery department of the Upper Tribunal, where unresolved disputes are heard. All cases brought before a tax tribunal are heard at the relevant HM Court.
What kind of issues can be brought before a tax tribunal?
UK tax tribunals are authorised to handle any disputes brought up by taxpayers, whether they are individuals or organisations. In addition, the tribunals concern themselves with both indirect taxes (Customs Duty or VAT) and direct taxation (such as corporation tax or income tax). Other tax-related matters that the tribunals can deal with include national insurance contributions, inheritance tax, stamp duty land tax, PAYE notices, capital gains tax, statutory payments, excise duties, climate change levy tax, and landfill taxes. The Tax Chamber of a tax tribunal cannot deal with disputes concerning tax credits, as these are the jurisdiction of the Social Security Chamber.
A tax tribunal can handle appeals related to both initial decisions and concluding reviews made by HM Revenue and Customs.
What is the procedure involved in appealing to a tribunal?
If you think that you have been subject to an erroneous tax decision, or if you believe that HMRC is conducting an unnecessary enquiry into your company’s direct taxation affairs, you must complete the form that can be found here. The appeal must be filed within 30 days of the HMRC’s decision you are disputing. Once received, the appeal will be allocated to the most adequate track: default, basic, standard, or complex.
The appeal will be acknowledged within 10 days of it being sent, and once the judge has made a decision, the parties involved will be notified within 5 working days of the sentence being signed. Under this legal regime, each party is responsible for paying their own costs. Complex cases or appeals sent from the First-Tier Tribunal’s Tax Chamber will be handled by the Upper Tribunal.