ARTG3330 - Reviews and appeals for indirect taxes: Payment of tax pending the outcome: Hardship applications
Section 84(3B) VATA 1994, s 16(3)(a)(ii) FA 1994
Before the Tribunal may hear a customer’s appeal, any disputed tax must have been paid to HMRC. This includes when the application to make an appeal is late. But if it would cause the customer hardship to pay the tax due they may ask HMRC to agree that payment be suspended until the tribunal appeal is decided. This is known as a hardship application.
The customer may make a hardship application by writing to HMRC at:
HMRC Legal Group
Indirect Hardship Team (S1759)
BX9 1ZT
- giving details of the appeal, and
- the reasons why they believe payment would cause hardship, and
- the amount they are asking to be suspended.
Business units that receive hardship applications should send the details to the Indirect Hardship Team, (SOLS) mailbox with any attachments and/or caseflow or electronic folder references.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
For Excise and Customs cases, instead of paying the duty the customer could provide guaranteed security for the amount of duty payable. Or, if it would cause the customer hardship we can waive the requirement to security or accept lesser security.
If the duty has not been paid and we accept any of full security, no security or lesser security we have to issue a certificate to that effect, see ARTG3350.
If HMRC refuses a hardship application
If HMRC refuse a taxpayer’s application for hardship, the taxpayer may ask the Tribunal to consider the hardship application. This must be done via a separate application to the Tribunal. The Tribunal will consider this new application in its own right and they will consider if HMRC were reasonable to refuse hardship. They should consider if the appellant has put themselves in a position of hardship to avoid depositing, paying or securing the amount of tax in dispute, and will decide the application at the time of the hearing.