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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Appeals: handling appeals and postponements: appeals received in debt management office

This subject is presented as follows.

Appeals against tax charges and postponement applications
Appeals against penalty determinations

Appeals against tax charges and postponement applications

A company or agent can appeal against an assessment or amendment and apply to postpone payment of tax. In the absence of an application to postpone payment, the tax as charged in the assessment or amendment remains payable in full.

An appeal and / or request for postponement relating to a tax charge should be made:

  • by the company or its agent
  • in writing. You can accept an appeal made by email if you are satisfied that it has been sent by the company or their agent from a known and trusted email address
  • to the responsible office.

When an appeal is sent to the Debt Management office, you may need to suspend collection of the liability while you refer to the responsible office. For more information see COM110000 onwards.

You should only suspend collection when you consider that there are valid grounds for the appeal.

Do not suspend collection when:

  • the appeal is not in writing or you are not satisfied that it has been sent by the company or their agent from a known and trusted email address
  • there is no application for postponement of the tax
  • the company or agent makes an unsupported claim that a repayment is due
  • collection of the charge has been suspended before
  • the liability has been previously stood over and subsequently released
  • you or another Debt Management office can answer the query raised
  • correspondence is a duplicate copy of earlier letter to the responsible office and it is clear the responsible office has dealt with the letter
  • you consider the correspondence does not constitute a genuine appeal, but is simply a delaying tactic.

If you are unsure whether or not to suspend collection, consult the Review Officer.

A suspension is cancelled automatically by COTAX when:

  • the time limit expires
  • the AP clears before the time limit has expired
  • an appeal is recorded
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

 

On receipt of an appeal or suspension against a tax charge, the responsible office either stands over or amends the charge, or uses function RSUD (Cancel Suspension) to cancel the suspension and confirm that collection is to proceed.

Any standover or amendment automatically cancels the suspension.

When the responsible office postpones collection of a liability, COTAX creates a postponement posting on the company’s record. Function VPPD (View Payment and Posting Details) shows these as follows.

  • SO. Standover.
  • ISO. Informal standover.
  • SOR. Standover release caused by the recording of a return.

The VPPD summary screen shows these postings under a general heading ‘stood over’. Once a postponement has been recorded on COTAX it is the responsibility of the case owner to actively manage the postponement. See COM10120 for further information on this subject.

When a company makes a payment that is more than the non-postponed amount and there is a postponement type posting on the AP, the CT Unit Cumbernauld does not reduce the postponement to accommodate the payment but treats the payment as an overpayment and refers the case to the responsible office.

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Appeals against penalty determinations

A company or an agent may appeal against a penalty. The postponement provisions do not apply. If the penalty is under appeal you cannot continue pursuit.

An appeal against a penalty determination must be made:

  • by the company or its agent
  • in writing. You can accept an appeal made by email if you are satisfied that it has been sent by the company or their agent from a known and trusted email address
  • to the responsible office.

On receipt of a valid appeal against a penalty determination, the responsible office:

  • records receipt of the appeal, which automatically stands over the unpaid amount charged on the determination
  • inhibits automatic output for the penalty, if necessary
  • actively manages the standover
  • takes action to settle the appeal.

The company may claim that it has a reasonable excuse for the late delivery of the return or the amount of the penalty charge is incorrect.

See:

  • COM10041 for a list of forms relevant to this subject
  • COM10042 for a list of functions to use in particular situations.