{"id":37215,"date":"2016-07-11T12:09:56","date_gmt":"2016-07-11T12:09:56","guid":{"rendered":"https:\/\/www.constablevat.com\/?p=37215"},"modified":"2016-07-11T12:09:56","modified_gmt":"2016-07-11T12:09:56","slug":"cvc-blog-disagree-vat-decision-hmrc","status":"publish","type":"post","link":"https:\/\/www.constablevat.com\/cvc-blog-disagree-vat-decision-hmrc\/","title":{"rendered":"CVC Blog – Disagree with a VAT decision by HMRC?"},"content":{"rendered":"
CVC frequently encounters businesses and charities that are in conflict with HMRC. This may be regarding the VAT liability of supplies or the VAT recovery method applied. HMRC may issue VAT assessments, refuse VAT claims and\/or issue penalties. CVC are often engaged once a dispute has arisen; however, conflict can often be avoided if professional advice is obtained in a timely manner. This means considering transactions and VAT recovery methods in advance; particularly where transactions are complex or there is uncertainty in VAT law or HMRC guidance.<\/p>\n
Once a dispute has arisen with HMRC there are several routes to resolution:<\/p>\n
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HMRC may offer a review of the decision, or a review can be requested. We would usually recommend a review is requested as a first step. The review should be carried out by an officer not previously involved in the decision. A review request offers the taxpayer an opportunity to put forward their view and HMRC will not request payment of the VAT or penalty in dispute while the review is in process.<\/p>\n
Even if the reviewing officer upholds HMRC\u2019s original decision, greater insight may be gained as to HMRC\u2019s view and interpretation of VAT law. This will allow a more informed decision as to whether to proceed to tribunal.<\/p>\n
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Alternative to the review process, or following review, it is possible to appeal HMRC\u2019s decision to the tribunal. An appeal must usually be made within 30 days of the decision or review decision. It is of utmost importance that time limits are adhered to. There are a large number of cases in which tribunals have dismissed applications to appeal out of time. Out of time appeals will only be heard in exceptional circumstances.<\/p>\n
The tribunal is independent of HMRC and will consider both sides of the argument before making a decision. HMRC are likely to only take those cases it believes, on balance, it has a chance of winning.<\/p>\n
It should be noted that the tax in dispute must be paid in advance of the hearing; although, hardship can be applied for. Disputed penalties do not have to be paid before the hearing.<\/p>\n
The tribunal process is often expensive and time consuming. In our experience cases may take months, even years, before they are resolved. This of course depends on the circumstances of the case.<\/p>\n
If either party disagrees with the decision of the First Tier Tribunal they may appeal to the Upper Tribunal. The Upper Tribunal may uphold the First Tier Tribunal\u2019s decision or overturn that decision. In some circumstances cases are referred back to the First Tier Tribunal. If a case is heard before the Upper Tribunal the process does not necessarily stop there. It may be possible for either party to appeal the decision of the Upper Tribunal to the Court of Appeal. Beyond this is the Supreme Court (the UK\u2019s highest court) and referrals on points of law may also be made to the Court of Justice of the European Union (CJEU). Although once the UK leaves the EU referrals to the CJEU may no longer be available.<\/p>\n
It should be noted that decisions of the lower tribunal are only binding on the party involved, whereas those of the higher courts set precedent on other taxpayers.<\/p>\n
It may be necessary to engage a solicitor or barrister as well as a tax advisor or accountant to assist with the process.<\/p>\n
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