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First-tier Tax Chamber
The Tribunals Service is part of the Ministry of Justice and provides administrative support for the Tribunals' judiciary who hear cases and decide appeals. The tax appeals system was created on 1 April 2009 and provides for tax appeals to be heard in the Tax Chamber in the First-Tier Tribunal, with a right of appeal with permission to the Upper Tribunal. The tax appeals system is totally independent of Her Majesty's Revenue and Customs (HMRC) and cases are heard by Judges and other qualified Members.
On this page:
What appeals does the First-tier Tribunal hear?
The Tax Tribunal hears the full range of appeals against HMRC decisions in relation to direct and indirect tax cases. The main HMRC decisions that the First-tier Tax Chamber deals with involve tax assessments and penalties.
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What are the First-tier Tribunal's powers?
The Tax Tribunal does not have unlimited powers. Sometimes, if the First-tier Tribunal accepts that your appeal is valid, it can replace the decision you are appealing against with the decision it thinks should have been made. In other cases, it can only direct HMRC to reconsider the HMRC decision. If the First-tier Tribunal does not accept that your appeal is valid, it will uphold the decision you are appealing against.
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Who decides how my appeal will be heard?
When you make an appeal the Tax Tribunal puts it into one of four categories (depending on the nature and complexity of your appeal):
- Default Paper;
- Basic;
- Standard; or
- Complex.
The Tax Tribunal will acknowledge your appeal in writing and tell you which category your appeal has been allocated and how your appeal will then proceed. If you disagree with the way your case has been categorised you can make representations to the Tax Tribunal. Specialist advice is essential in this area.
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What is a Default Paper case?
Default Paper cases, by their nature, are generally decided by the First-tier Tribunal after reading the Notice of Appeal and the other written material provided by you and HMRC. Once the Tax Tribunal notifies HMRC that you have made an appeal against a decision (which the Tax Tribunal decides falls into this category), HMRC has 42 days to provide a Statement of Case to the Tax Tribunal. When this Statement has been prepared, HMRC will send a copy to you.
You (or your advisor on your behalf) may provide a written response to HMRC's Statement of Case within 30 days. This should be sent to the Tax Tribunal and copied to HMRC.
Default Paper cases are dealt with without a hearing - though you can ask for your appeal to be decided at a hearing. If you or HMRC request a hearing (or it is decided there should be a hearing by the First-tier Tribunal), you will be expected to attend. HMRC will also send a representative to the hearing.
Unless you have asked for an oral hearing, the case will be decided by a Judge once you make your response (or if you do not provide one within 30 days). The First-tier Tribunal will issue its decision as soon as possible after considering your case.
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What is a Basic case?
Basic category appeals will be listed for a hearing and you are expected to attend. You (or your advisor on your behalf) will be given the opportunity to put forward your case, show the First-tier Tribunal any relevant documents and, if you wish, call witnesses. HMRC will also attend. It too may put its case, produce documents and call witnesses. The hearing will be informal and the Tribunal will usually tell you what it has decided at the end of the hearing.
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What are Standard and Complex tribunal cases?
Once the Tax Tribunal notifies HMRC that you have made an appeal against a decision which the Tax Tribunal decides falls into this category, HMRC has 60 days to provide a Statement of Case. This will contain similar information to that described above for the default paper category, though the facts and issues are likely to be much more complex. As with default paper cases, HMRC will send you a copy of its Statement of Case.
You (or your advisor on your behalf) will normally have 42 days from receipt of HMRC's Statement of Case to provide to the Tax Tribunal (and HMRC) with a list of the documents that you intend to rely on at the hearing. HMRC also has to provide such a list and copy its list to you. The First-tier Tribunal may also make any other direction at this time as to what may be required of you and determine that your case requires more intensive case management. You (or your advisor on your behalf) will have the opportunity to express your views on how your case should be managed.
Standard and Complex appeals are heard at a number of venues across the UK. The Tax Tribunal will, where possible, arrange for your appeal to be heard at a venue reasonably close to where you live or work. Sometimes, however, due to the size or complexity of an appeal, this is not possible.
The First-tier Tribunal Judge may give their oral judgement on the day of the hearing or provide it at a later date after deliberation (normally within 28 days of the hearing).
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What happens at a First-tier Tribunal hearing?
The length of a hearing is determined by the size and complexity of the case. In most cases, the First-tier Tribunal Judge will have looked at the papers and any case statement and response in advance of the hearing.
During the hearing, each side is required to present its case. In most cases, the appellant (you) goes first. The appellant is often called as a witness and it is essential that time and effort has been spent on ensuring that your testimony is clear, concise and without contradiction. The defendant (HMRC) has the right to cross examine any witness produced in support of the appellant's case. Equally, the appellant can cross-examine a defendant witness.
In most cases, the decision that the First-tier Tribunal Judge is required to make is a question of fact, which is then applied to the legislation and stated case law. Therefore, it is imperative that your case is well presented and well-argued. Specialist tax litigation advice is essential.
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Will I have to pay to go to Tribunal?
For appeals started after 1 April 2009, each side will typically pay their own costs (unless the First-tier Tribunal orders one side to pay costs to the other). Costs awards are quite rare and usually involve one side having behaved unreasonably in the way they have carried out the case.
If your appeal is categorised as 'complex' the winning party can ask for the losing party to pay its costs (unless you can choose to opt out). So, each party pays their own costs except where one side is held to have behaved unreasonably.
For appeals started before 1 April 2009, the First-tier Tribunal has discretion to order that they continue to be covered by the old rules..
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How can OneE TDI help?
The new appeal and review process and Tax Tribunal system are more formal and 'legalistic' than those that most taxpayers (or their advisers) will have previously experienced, with greater requirements placed on the submission and presentation of evidence and strict time deadlines that must be met. It is a much more litigious process. Trying to handle a successful appeal or present representations for a case review whilst running a business or an accountancy practice can be extremely difficult and specialist advice is invaluable. HMRC now has dedicated specialist Advocacy units who only deal with Tax Tribunal hearings. If HMRC is engaging its own specialists so should you!
At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations work. We are former HMRC inspectors/investigators – so we know how HMRC thinks! We are constantly dealing with inspectors/investigators and the specialist Advocacy units so we have up to date insights into current practice and policy and consistently negotiate the best possible terms for our clients - often without the case going to the Tax Tribunal. We offer confidential, non-judgemental advice to best defend our clients and our advice saves them time and money and helps reduce their potential exposure to tax, interest and penalties.
If agreement cannot be reached with HMRC, we provide our clients with realistic advice regarding the likely success of any appeal and the potential costs involved. We also work with a team of specialist Associates to provide a comprehensive, cost-effective service. Our sister company, OneE Tax, has a specialist team of Chartered Accountants, Chartered Tax Advisers, Lawyers and Trust Practitioners and we work with proven lawyers and barristers when the need arises.
We take control of and manage all parts of a contentious tax dispute so that our clients can get on with their life and their business. What price peace of mind?
Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.
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How can I contact OneE TDI?
If you would like a free, confidential, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.
Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.
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Tax Tribunals