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HMRC internal manual

Appeals reviews and tribunals guidance

From
HM Revenue & Customs
Updated
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First-tier and Upper Tribunals: Outcome of the tribunal proceedings: Tax payable or repayable following the tribunals decision

Amounts payable or repayable in line with the tribunal’s decision must be paid even if there is an appeal against the tribunal’s decision. Any hardship application (indirect taxes) or postponement (direct taxes) that was allowed will cease to have effect.

Where the requirement to pay tax has been postponed (direct) or suspended due to hardship (indirect), the decision maker should release the tax due for collection as soon as they receive notification of the tribunal’s decision, so that the correct amount of tax will be paid.

  • If the amount payable to HMRC as a result of the tribunal’s decision is greater than the amount paid to date, the additional amount charged is due and payable 30 days after the decision maker sends the customer a notice of the total amount due
  • If as a result of the tribunal’s decision any tax is repayable, the decision maker should arrange for that tax to be repaid with any appropriate interest, see ARTG11040.

Payment of tax where there is a further appeal

For indirect taxes, where there is a further appeal HMRC may apply to the tribunal for payment or repayment not to be made on grounds of revenue protection (e.g. Section 85B(3) VATA 1994). If the tribunal or relevant appellate court thinks it is necessary for the protection of the revenue they may either

  • give HMRC permission not to repay the tax to the customer, or
  • require adequate security to be provided before HMRC make payment or repayment.

The customer may ask HMRC to agree that they should not have to pay or repay the amounts due on grounds of financial extremity (e.g. Section 85B(4) VATA 1994). If HMRC are satisfied that financial extremity would result from enforcing payment or repayment they may

  • decide how much, if any, of the amount under appeal should be paid or repaid, or
  • require adequate security from the customer, or
  • suspend the requirement to pay or repay.

If HMRC and the customer do not agree on the amount to be paid or repaid, the customer can apply to the tribunal from whom permission to appeal was sought to agree that they should not have to pay or repay the amounts due on grounds of financial extremity. The tribunal or court may

  • decide how much, if any, should be paid or repaid, or
  • require adequate security from the customer, or
  • suspend the requirement to pay or repay.

Any decision to suspend the requirement to pay or require security will apply until the outcome of the further appeal is decided, when amounts will be due or payable in line with that decision. A further application under these provisions may be made if there is a further appeal.

We do not normally take insolvency or enforcement action for a debt which is under appeal unless there is a good reason to do so, and any decision will be made on the individual circumstances of the case.

“Payment of penalties where there is a further appeal

Where the dispute relates to a penalty, the penalty should be informally stood over while the review and appeals process is ongoing (ARTG2510 (direct taxes) ARTG3320 (indirect taxes)). If there is a further appeal the penalty should remain stood over until the appeal process has been exhausted.”