Tax appeals: introduction of an internal review procedure
Resource type: Legal Update: archive
Published on 01-Apr-2008
On 25 March 2008, HMRC published a summary of responses to its consultation document "Tax appeals against decisions made by HMRC" (the paper). For background, see Legal update, Pre-Budget Report: Consultation on tax appeals. The most significant aspect of the consultation was HMRC's proposal for the introduction of an internal review of its decisions for all tax matters, likely to take effect from April 2009. The proposal received "overwhelming support" and the paper sets out the government's future proposals, which include:
The introduction of a statutory right to a review.
The time limit for accepting a review offer will be 30 days from the date of the offer.
HMRC will be required to complete the review within 45 days unless that limit is varied by agreement.
Taxpayers will have an opportunity to put their case to the person carrying out the review.
The review officer will notify his decision and reasons to the taxpayer.
Taxpayers will be able to appeal a decision rather than accept an offer of review. If a decision is reviewed and the taxpayer does not accept the outcome, the taxpayer may appeal the decision but the tribunal will consider only those aspects which are still in dispute.
Further proposals are being considered (including repealing section 84(2) of the VATA 1994 and transitional provisions) and the detail of the procedure has yet to be established. In the meantime, a power has been included in the Finance Bill 2008 (see clause 119, Volume 1, first version, ordered to be printed on 18 March 2008), which enables HMRC to establish the procedure by statutory instrument. A draft of the instrument will be published during the Committee stages of the Finance Bill 2008.