DST68200 - Appeals: handling appeals and postponements: introduction

Part 8 of Schedule 8 of Finance Act 2020 provides for appeals against HMRC decisions on tax. The following pages provide more detail on the appeals procedure and time limits that apply.

Right of Appeal

A responsible member may appeal against any of the following decisions on tax:

  • A jeopardy amendment during a Compliance Check to prevent loss of tax;
  • An amendment made by a closure notice;
  • A discovery assessment;
  • An assessment or supplementary assessment for excessive repayment of tax.

A responsible member cannot appeal against a determination of the tax liability in the absence of a DST return.

Although not a decision on tax, a person served a payment notice to pay a DST liability may also appeal against the notice in limited circumstances (refer to DST66600 – Payment Notices: Appeals).

Notice of Appeal

The Notice of Appeal must be given to HMRC in writing and within 30 days after the notice being appealed was issued.

The Notice of Appeal must specify the grounds of appeal.

Late Notice of Appeal

A late Notice of Appeal may be submitted after the 30 day limit if HMRC agree or a Tribunal gives permission for notice to be given.

HMRC must agree to notice being given after the 30 day limit if the appellant has requested in writing that HMRC do so and HMRC are satisfied that there was a reasonable excuse for not giving the notice before the relevant time limit, and that the request has been made without unreasonable delay.

HMRC must notify the appellant whether HMRC agrees to the request.

Postponement of Tax

When a company appeals against an assessment or amendment of an assessment, it may apply to postpone payment of some or all of the tax charged.

The appellant must make the request for a postponement in writing to HMRC, within the same time limits as the appeal.

HMRC can accept an appeal or request for postponement of tax made by email if HMRC is satisfied that it has been sent by the appellant or their agent from a known and trusted email address. The postponement request must state the amount believed to be overcharged to tax and the grounds for that belief.

An application for postponement may be made more than 30 days after the specified date, if there is a change in case circumstances which the appellant believes results in an overcharge of tax.

HMRC will then determine the amount of tax the payment of which should be postponed pending the determination of the appeal.

If the appellant does not agree with that determination it may refer the application for postponement to the tribunal within 30 days from the date of the document HMRC notified them of their determination.

The amount of tax which payment is to be postponed pending the determination of the appeal is the amount by which it appears that there are reasonable grounds for believing that the appellant has been overcharged.

HMRC and the appellant may agree the amount of tax to be postponed but if this has not been done in writing a confirmation notice must be issued. The confirmation may come from HMRC or the appellant.

If after a determination of the amount postponed, there is a change in case circumstances that results in either party considering that the amount postponed is no longer accurate, then either party may apply to the tribunal for a revised determination (if the parties cannot agree to a revised amount).

Although payment of the tax may be postponed, interest will continue to accrue between the original due date and the date of eventual payment on any amounts of tax that have been unpaid.

Steps that may be taken following a notice of appeal

After a notice of appeal has been given to HMRC the appellant may:

  • Have a review, whether by accepting HMRC offer of a review or by requesting a review (see ARTG4000 onwards), or
  • Notify the appeal to the Tribunal (see ARTG2400 onwards).

None of these prevent HMRC and the appellant from attempting to settle the appeal by agreement.

If an appeal is brought against a jeopardy amendments under Paragraph 8, Schedule 8 Finance Act 2020, while a Compliance Check into the return is in progress the matter cannot be reviewed or notified to the tribunal until the Compliance Check is completed.

For general information on appeals and postponements see the Appeals, Reviews and Tribunals Guidance (ARTG) Manual.

Conclusion of appeals

Appeals can either be concluded by agreement between HMRC and the appellant or determined by the Tribunal.

If the appellant notifies HMRC that they do not wish to proceed with the appeal and HMRC does not respond within 30 days in writing indicating they are unwilling for the appeal to be withdrawn, then the appeal is considered to be concluded as an agreement that no variation was necessary.

When HMRC and the appellant can reach agreement, HMRC must write to the appellant setting out whether the decision appealed against should be:

  • Upheld without variation,
  • Varied in a particular manner,
  • Discharged or cancelled.

If the appellant does not respond in writing within 30 days of the settlement agreement that they wish to withdraw from the agreement, then the appeal is treated as if the tribunal had decided the appeal in the way set out in the settlement agreement.

Once the appeal has been determined any tax overpaid must be repaid or any tax unpaid must be collected.