Appeal System + Judicial Review: explain income tax appeals process. apart from an appeal,
are there any other legal challenges a taxpayer can bring against the HMRC’s actions?
This essay will evaluate the income tax appeals system and analyse other
methods a taxpayer can bring against HMRC’s actions.
Taxpayers have the right to bring an appeal against unsatisfactory HMRC
assessment by giving written notice within thirty days per s31 and 31A Taxes
Management Act (TMA) 1970. Taxpayers have 2 options to appeal under
ss49A to 49I: (i) appeal directly to tribunal; or (ii) let the HMRC internally
review its own assessment (preferable). To emphasise on internal review’s
independence, trained review officer who has not previously been involved
with the decision will be allocated. This idea of internal review is broadly
supported by Gammie in “New Landscape”, to avoid the need for an appeal.
Following s.47C, the (i) option is to appeal directly to the First-tier
Tribunal (FTT), which is intended to be quick, cheap and local. Procedures vary
accordingly to fit the nature of the case and the category of ‘complex’ is
defined by r23 First-tier Rules (FTR) 2009 as complicated, lengthy, or involving
a huge sum of money where r28 may recommend complex cases to be
transferred to the Upper Tribunal (UT) with the parties’ consent.
The rules are similar disregard the case is heard in a FTT or UT. As per
Haythornwaite v Kelly, the burden is on the taxpayer to prove the assessment
is incorrect per s.55 TMA as taxpayers should know better on their own
financial affairs. Following Goulding J in Wicker v Fraser, a tribunal hearing
would be an adversarial contest between the taxpayer and HMRC, instead of
inquisitorial in nature. Taxpayers also have the right under r11 of both
Tribunal Rules to have their case presented by a representative, whether or
not legally qualified, as taxpayers may not have sufficient expertise.
As per r32 FTR, a hearing will be made public unless exceptional grounds
applied, e.g. to protect one’s right to privacy or to maintain confidentiality of
sensitive information. Yet, Banerjee (No2) echoed that privacy would only be
given effect in ‘truly exceptional’ situations on the basis of open justice.
Furthermore, the tribunals have no general power to require the losing
party to pay the winner’s legal costs. This has been criticised by taxpayers as
deterring appeals, as the legal bill will always be a burden despite the outcome
of the case. Lots of taxpayers are thus forced to accept unfavourable terms.
Yet, r10 FTR authorised the FTT to award cost against a representative
who wasted costs, or behaved unreasonably in the proceedings, or in a
‘complex’ case. However, a taxpayer has the right to avoid neither side to be
are there any other legal challenges a taxpayer can bring against the HMRC’s actions?
This essay will evaluate the income tax appeals system and analyse other
methods a taxpayer can bring against HMRC’s actions.
Taxpayers have the right to bring an appeal against unsatisfactory HMRC
assessment by giving written notice within thirty days per s31 and 31A Taxes
Management Act (TMA) 1970. Taxpayers have 2 options to appeal under
ss49A to 49I: (i) appeal directly to tribunal; or (ii) let the HMRC internally
review its own assessment (preferable). To emphasise on internal review’s
independence, trained review officer who has not previously been involved
with the decision will be allocated. This idea of internal review is broadly
supported by Gammie in “New Landscape”, to avoid the need for an appeal.
Following s.47C, the (i) option is to appeal directly to the First-tier
Tribunal (FTT), which is intended to be quick, cheap and local. Procedures vary
accordingly to fit the nature of the case and the category of ‘complex’ is
defined by r23 First-tier Rules (FTR) 2009 as complicated, lengthy, or involving
a huge sum of money where r28 may recommend complex cases to be
transferred to the Upper Tribunal (UT) with the parties’ consent.
The rules are similar disregard the case is heard in a FTT or UT. As per
Haythornwaite v Kelly, the burden is on the taxpayer to prove the assessment
is incorrect per s.55 TMA as taxpayers should know better on their own
financial affairs. Following Goulding J in Wicker v Fraser, a tribunal hearing
would be an adversarial contest between the taxpayer and HMRC, instead of
inquisitorial in nature. Taxpayers also have the right under r11 of both
Tribunal Rules to have their case presented by a representative, whether or
not legally qualified, as taxpayers may not have sufficient expertise.
As per r32 FTR, a hearing will be made public unless exceptional grounds
applied, e.g. to protect one’s right to privacy or to maintain confidentiality of
sensitive information. Yet, Banerjee (No2) echoed that privacy would only be
given effect in ‘truly exceptional’ situations on the basis of open justice.
Furthermore, the tribunals have no general power to require the losing
party to pay the winner’s legal costs. This has been criticised by taxpayers as
deterring appeals, as the legal bill will always be a burden despite the outcome
of the case. Lots of taxpayers are thus forced to accept unfavourable terms.
Yet, r10 FTR authorised the FTT to award cost against a representative
who wasted costs, or behaved unreasonably in the proceedings, or in a
‘complex’ case. However, a taxpayer has the right to avoid neither side to be
