Partner Article

The new tax tribunal system

With Helen Foy at Watson Burton LLP Law Firm

On 1 April 2009 the existing Tax Tribunals (the General Commissioners, Special Commissioners, VAT and Duties Tribunal and the Section 704/706 Tribunal) ceased to exist and were replaced by a unified tribunal system. Since 1 April any appeals concerning decisions made by HMRC on matters such as Income Tax, Inheritance Tax and Corporation Tax are now heard by the new tribunal system.

Before an appeal can be made to the tribunal, an appeal to HMRC must have already been made within 30 days of an appealable decision being made. An appealable decision means that the right of appeal exists in law and the decision letter from HMRC will state whether this is the case. Any written appeal to the tribunal must then reach it no later than 30 days after the decision, or review decision, of HMRC but if an appeal is not made to the tribunal within this time limit then HMRC’s conclusions are treated as if they are agreed. If an appeal if notified to the tribunal outside the 30 day time limit, the tribunal will notify HMRC that a late application has been made but the tribunal will decide whether or not to accept it. Therefore adhering to the strict 30 day time limit is imperative in ensuring any right to appeal is not lost.

The new tax tribunal system is a two tier structure which consists of the First Tier and the Upper Tribunal. The First Tier is divided into several chambers and the “Tax Chamber” will hear almost all appeals against HMRC decisions. There are four different case categories within the First Tier, so the more straightforward cases are decided on paper and more complex cases are listed for hearings. The tribunal is independent and appeals are decided by panels which consist of both legally and non-legally qualified professionals. Once the decision of the panel has been made, a full written statement can be requested (if not already provided) which sets out its reasons for the decision.

If the decision of the First Tier is unsatisfactory there is a right of appeal, with permission and on a point of law, to the Upper Tribunal. Any application for permission to appeal must be received by the First Tier no later than 56 days after its provision of the written decision statement. If the First Tier refuses permission to appeal then the Upper Tribunal may be approached for permission. Most decisions of the First Tier can only be appealed against if they were wrong in law, such as where the law was wrongly interpreted or there was not enough evidence to support the tribunal’s decision.

Appeals from the Upper Tribunal are on a point of law only to the Court of Appeal. Permission is required from the Upper Court or, if it refuses, from the Court of Appeal. The appeal must be made within one month of the written decision being sent by the Upper Tribunal.

With regard to costs the First Tier has a no costs regime, except for cases designated as “complex” within the four case categories of the First Tier or where one of the parties has acted unreasonably. The Upper Tribunal can award costs in tax cases, but first must consider representations from HMRC and the other party to the dispute.

If you have any comments or questions about this article or any Litigation matters, please contact Helen Foy of Watson Burton LLP at helen.foy@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .