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How to appeal a decision made by HMRC

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It is fantastically annoying when someone demands that you pay them something that you do not think you owe. I come across this all too often in dealing with HMRC, and I often complain (quite loudly) to my wife about it.

My wife is sensible, and doesn’t like tax, so she tells me to stop being boring and talk about something else. However, I think that it is important to know what options are open to you when you feel that you have been wronged and how to deal with it. Fortunately, in the world of tax, the options and process are written down for all to follow.

Your first port of call is to appeal the decision. You need to do this in writing. You should ensure that you put down exactly why you do not think you should pay the amount that HMRC believe you owe.

In my experience, it is always best to be polite. HMRC will get thousands of appeals every year – a lot of which will be written in an angry (and sometimes abusive) manor. All you are trying to do is get HMRC to agree that you do not owe the money. This is much easier if you are nice to them – at least in the beginning.

If HMRC does not agree, then in many circumstances you can ask for an independent review of the matter. The independent reviewer is also an HMRC officer; however they will not be connected with the original case and will probably have never met the HMRC officer dealing with your appeal.

If you follow this route, make sure that your letter requesting an independent review provides all the reasons why you do not believe you owe the amount HMRC are demanding. This is the first letter that the review officer will read, so they way it is drafted can go a long way towards getting the desired result.

Where none of the above works, your last option is to appeal to the Tribunal. The Tribunal is a bit like a Court. If your appeal is accepted to be heard by the Tribunal, it will be heard by a Judge (maybe two). You, or your Advocate, will present your case, and HMRC will present its case. There may be witnesses depending on the nature of the appeal.

There are time limits for making appeals. They must be done within 30 days of HMRC reaching a final decision. If you do not, you will have to appeal to the Tribunal for permission to make a late appeal.

To appeal a decision by HMRC, you or your advisor needs to complete a standard form which can be found here:

The form asks lots of simple questions, like the sort of tax or penalty that you are appealing, whether an internal review has been undertaken and the amount of tax or penalty that you are appealing against. It also asks for the grounds of your appeal.

By the time you get to the appeal stage you will have accumulated a vast array of documents. Letters flow backwards and forwards and, as you will get tired of repeating yourself, many will not cover all of the issues and arguments.

The ‘grounds for appeal’ part of the ‘notice of appeal’ is where you can bring this all together. I always try at this point to take a few steps back from the matter and consider how to put my arguments forward.

Remember, this is the first piece of paper that anyone will read and, if well drafted, it can sway the reader to your side even before they delve into the mountains of documents underneath.

Once you are at the Tribunal it is important to take your time and make sure that you get your points across. It can be daunting, so for those of you that are not used to such matters, I suggest that you get good representation.

Although many believe that they have nowhere to turn when HMRC tell them they owe something they do not think they owe, unlike in many walks of life, there are ways of appealing their decisions.

Thomas Adcock is a tax partner at Carter Backer Winter and a former corporate tax inspector. 

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