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HMRC internal manual

Compliance Operational Guidance

Alternative rights of recovery (PAYE directions): regulation 72(5) condition B / 81(4) condition A or B: appeals process: the appeal brief

Where the customer refers the matter for Tribunal, (see ARTG7510) the decision maker will be notified by CRAU and CRAU will inform the Tribunal Service of the contact person. To ensure consistency, the Appeal Brief stencil must be used.

The Appeal Brief

The appeal brief should show the Regulations under which the direction was signed, and the following information, using the headings shown

  • the employer’s name and PAYE reference number
  • the appellant’s name and address
  • the tax and NIC under-deducted
  • the agreed facts
  • the points at issue - the points that the appellant contends
  • the points that HMRC contends
  • vulnerabilities/weaknesses in HMRC’s case
  • the effect of the decision.

The agreed facts

The appeal brief should contain the agreed facts - where these are based on documents, attach the relevant document and give a cross-reference to it. For the tribunal, the whole document may be needed, but at this stage it is sufficient to attach just the relevant page. Remember, facts are only agreed if both sides agree them.

Points at issue

You should show the points that the appellant contends; these are the issues that the appellant does not agree with.

Similarly, you should list the points that HMRC contends. You should include here the legislation that you are relying on, for example Regulation 81(2) of S.I. 2003/2682, because we take the view that the employee received the pay knowing that the employer wilfully failed to deduct the amount of tax that should have been deducted. The Appeals Officer then knows that he will have to show that this was the case.

Vulnerabilities/potential weaknesses in HMRC case

Try to anticipate possible arguments that the appellant may put forward, and the possible counter-arguments needed to convince the Tribunal.

Effect of this decision

Explain here that by rejecting the appellant’s appeal, the Tribunal will confirm the Direction, allowing underpaid and under-deducted tax to be collected through the Self Assessment system.

Burden of proof

The burden of proof at a tribunal will be with HMRC. A direction notice can only be made where the employer has wilfully failed to deduct the right amount of tax and the employer received payments knowing this to be so. It is up to HMRC to show that these conditions are met. Your brief must therefore detail examples of situations where the employer had wilfully failed to deduct the right amount of tax and examples to prove that the employee knew that this was so.

However, if the grounds of the appeal are that the figures are wrong, then the burden of proof is with the appellant.