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There may be times when HMRC makes a decision you don’t agree with; perhaps an assessment has been issued and you don’t agree the amount of tax charged, or HMRC may be asking for payment of a security. If you disagree with a decision made by HMRC, you are able to challenge it. There are many rules that apply to appealing against a decision and the process is different for direct taxes and indirect taxes.

What are indirect and direct taxes?

There are several types of direct taxes, but the most common are Income Tax, Stamp Duty Land Tax, Inheritance Tax,HMRC Advice Capital Gains Tax and Corporation Tax. Some of the more commonly seen indirect taxes are VAT, Hydrocarbon Oils Duty, Alcoholic Liquor Duties, Customs Duty and Tobacco Products Duty.

The appeal process

If a decision has been made relating to direct taxation, including self-assessment, or a penalty issued in association with a direct tax, you can appeal against it. The direct tax appeal process will also apply if you receive a notice to produce documents or information, even if it refers to indirect taxation. If you fail to comply with the notice, you may be charged a penalty, which can also be appealed against using the direct tax procedures.

An appeal has to be made within 30 days from the date of the decision, either by letter or using an appeal form. You must inform HMRC of the decision against which you are appealing and why you are challenging it. At this stage, you may be able to reach an agreement with HMRC and at this time you will be expected to pay any outstanding tax or provide the information required.
If you can’t reach an agreement, you can ask for an independent review. If matters are still not resolved you may take the case to a Tribunal. The process is similar for indirect taxes, although there is no informal review to come to an agreement; if you don’t agree with a decision you must ask for a formal review within 30 days of the decision. If the original decision is upheld, you may take the case to Tribunal.

Appealing to Tribunal

In both cases, you can apply to a First-tier Tribunal. However, if you’ve requested a review by HMRC, you must wait for the outcome before appealing at Tribunal. If you have submitted an appeal to Tribunal, you can’t then ask for a formal review.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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