If you disagree with HMRC’s assessment or penalty, then you should first send notice to appeal the decision to HMRC. If HMRC makes a tax decision against you, you can contact HM Revenue and Customs (HMRC) or professional advice should be sought.
Our London Tax Solicitors and Barristers have vast experience of tax laws and first hand commercial, litigation and advocacy experience. If you need HMRC Tax Disputes advice, we are available to aid you at every stage of the HMRC appeals process. Members of our legal team have first-hand experience and working knowledge of the internal workings of HMRC. We have a proven track record of successfully contesting disputed tax assessments and penalties with HMRC.
Notice of Appeal to HMRC
The first recourse for a taxpayer wishing to dispute a decision of HMRC is to examine the decision letter sent by HMRC which will contain instructions on how to appeal the decision made. An appeal can be lodged if the taxpayer has the right to appeal the HMRC decision. For example, appeals can be lodged against decisions about:
- a tax bill (Corporation Tax/VAT);
- alteration of Self Assessment after an enquiry because HMRC believe there to be an error;
- a claim or disallowing a claim for tax relief;
- a request to check business records;
- issuance of an incorrect coding notice;
- refusal of a sub-contractor’s certificate; and
- a penalty or surcharge which is incorrect or unjust (for example, filing a tax return late/providing an inaccurate return/paying tax late/failing to keep adequate records).
HMRC Appeal against a Tax Decision
Notice to appeal the tax decision must be made in writing by the taxpayer (or their legal representative) to HMRC by completing the appeal form attached to HMRC’s penalty letter or by following the instructions on the letter. If there is no appeal form attached to HMRC’s letter, then alternatively a written submission can be made to the HMRC office related to that particular tax return. The appeal must include:
- the taxpayer’s name or business name;
- the tax reference number (found on the HMRC decision notice);
- what the disputed tax decision is and reasons why the taxpayer believes it be incorrect;
- what the correct figure should be and how the taxpayer’s calculation was made; and
- the taxpayer’s signature.
It is essential to appeal promptly within 30 days and seek early specialist advice because a late response can be fatal to any appeal. It is possible to give notice of appeal after the 30 day limit but only with the permission of either HMRC or the tax tribunal (section 49, Taxes Management Act 1970). HMRC can give leave for late notice of appeal only if:
- there was a reasonable excuse for not giving notice within 30 days; and
- the request for permission to appeal after the expiry of the time limit was made without an unreasonable delay.
Appeal to HMRC against a Tax Penalty
If HMRC have assessed you for a tax penalty then an appeal can be lodged against the penalty. There are penalties for late payment of tax, late filing of tax returns and late notification of liability to pay tax.
Appealing penalties for late filing of returns and paperwork or late payment can be applied to any of these types of taxes:
- Self Assessment Tax Return deadlines and penalties (form SA 370- see below);
- PAYE/National Insurance payments and deadlines;
- PAYE late payment penalties (appeal online using HMRC’s PAYE for employers service);
- Missed VAT deadlines – penalties and surcharges (form WT2 if received a surcharge for submitting online VAT Return late and claim a “reasonable excuse”);
- Late returns and late return penalties under CIS; and
- Corporation Tax penalties (form WT1 if there were issues sending a Company Tax Return).
For example, you can appeal a penalty for the late filing of a tax return, where a penalty can be charged even if no tax is owed. Late filing penalties start with a fixed £100 penalty that escalates to fixed daily penalties and/or tax-geared penalties if the failure continues.
“Reasonable Excuse” Appeal against a Late Tax Return Penalty
Late filing penalties can be cancelled if you has a “reasonable excuse” for the late filing. Prior to an appeal being lodged, the taxpayer must send a tax return or have told HMRC that there is no need to complete one. The appeal can be issued using the online service for tax returns from 6 April 2015 onwards or by using form SA370 and must contain:
- the penalty date of issuance;
- the Self Assessment tax return date of filing; and
- the details of a reasonable excuse for late filing.
A “reasonable excuse” is an excuse that, when viewed objectively, is reasonable in the context of the delay that triggered the penalty. The “reasonable excuse” must continue throughout the period from the missed date of filing to a date shortly before the actual return. HMRC takes a narrow view of what is a valid “reasonable excuse” for the late filing of a return and examples include:
- no return was due;
- HMRC provided incorrect advice about filing deadlines;
- no notice to file a return was received;
- the taxpayer thought online filing had worked when it later transpired that it did not due to service issues with HMRC online services;
- the taxpayer had posted a return on time;
- the taxpayer’s partner or close relative died shortly before the tax return deadline;
- an unexpected stay in hospital prevented the taxpayer from dealing with their tax affairs;
- computer failure before or whilst preparing the tax return;
- fire, flood or theft prevented tax return completion;
- unexpected postal delays; or
- delays related to a disability.
According to HMRC, the following are examples of what will not be accepted as a “reasonable excuse”:
- the taxpayer relied on a third party (for example, an accountant or business advisor) to send the return and the third party failed to do so;
- payment failed as the taxpayer did not have sufficient funds;
- the taxpayer found HMRC’s online system too difficult to use;
- no reminder was issued by HMRC; or
- there was a mistake on the tax return.
It is strongly recommended that legal representation is sought when appealing a tax dispute with HMRC. We have a team of specialist tax solicitors and barristers that are able to successfully negotiate with HMRC on a taxpayer’s behalf. It is essential to seek advice as soon as possible because an appeal must be lodged within 30 days and a late response can be fatal to any appeal.
Expert London Tax Lawyers
If you need HMRC Tax Disputes advice, we are available to aid you at every stage of the HMRC appeals process. Members of our legal team have first-hand experience and working knowledge of the internal workings of HMRC. We can provide you with the very best representation in negotiations, throughout the HMRC internal review process and in front of the Tax Tribunal. Our team specialises in successfully challenging HMRC decisions and will assist you in every aspect including developing a strategy.
We are experts in adeptly presenting evidence and employing bespoke arguments combining the facts of your case, previous cases and current legislation to ensure your appeal is a successful one. We provide urgent advice and representation to clients from our unique expert team of established tax and duties specialist solicitors and barristers with a proven track record of delivering authoritative results. Just call us on 0207 1830 529, or email firstname.lastname@example.org.