Debt and return pursuit: SA: daily penalties: appeals against daily penalties
Note: This guidance applies to tax return years 2009-10 and prior. For 2010-11 onwards daily penalties appeals will mainly be actioned by Personal Tax Officers - see SOP SA penalty objection/appeal in DMSS.
Receiving an appeal
An appeal can be from a taxpayer or their agent and should
- be in writing to HMRC
- be made within 30 days of the issue of the Notice of penalty (SA521 2009-10 and prior, SA370/SA371 2010-11 onwards) be against an appealable decision
- state the grounds of the appeal.
In addition once an appeal has been made to HMRC the appellant can notify their appeal to Her Majesty’s Courts and Tribunals Service (HMCTS) at any time, unless there is a review underway (see Offer of review).
If it is obvious that a letter is an appeal but all the required information has not been submitted you should contact the appellant to obtain it: do not reject the appeal for this reason.
The appeal must be acknowledged and recorded on both IDMS Record Actions and SA notes.
Grounds for appeal
You should not consider the grounds of appeal if the return is still outstanding. The appellant should be informed that the return need to be filed before the appeal can be considered.
Each case should be carefully considered taking into account all the relevant facts and circumstances. There is guidance on what we consider is and is not a reasonable excuse in the SA Manual, (for years to 2009-10 SAM61060 and for 2010-11 onwards SAM61290), with additional guidance on the approach to take on common grounds of appeal in the Appeal Guide.
Appeal against excessive amounts
An appeal can be made against the amount of the penalty. You should consider the reasons why the daily rate was charged originally, and if it is evident that the factors and circumstances that you based that daily rate on have changed, then consideration should be given to revising the rate.
You can accept an appeal outside of the 30 day time limit if you are satisfied that
- there was a reasonable excuse for not appealing within the 30 day time limit and
- the appeal was made as soon as possible after that.
If you do not accept the late appeal you must inform the appellant in writing with the reasons why and advise that if they disagree they can appeal to HMCTS to consider their request.
Dealing with the appeal
- accept the grounds and uphold the appeal
- ask that the appeal is withdrawn where you consider that they do not have a reasonable excuse
- determine the appeal through agreement
- offer a review.
Once an appeal has been received you may need to contact the appellant/agent to discuss the appeal further in order to resolve the dispute. Do this by telephone wherever possible.
If during the discussions you reach an agreement you must confirm this in writing. The appeal will then be regarded as settled under Section 54 TMA 1970. This means final and conclusive, though the appellant has 30 days in which to appeal the agreement if they change their mind.
If an agreement cannot be reached you should write and advise the customer of your decision, providing full explanation for your decision (a decision letter).
The letter should include
- the facts
- what the decision is
- the reasons
- the law supporting the decision
- the amount that is now due
- what will happen if you do not hear from the appellant within the time limit.
You must also let the appellant know their rights if they disagree with the decision including
- their right of an internal review of the decision or appeal to HMCTS
- the relevant time limits
- where to get further information.
Offer of an internal review
Appellants have a legal right to have their case reviewed by an independent officer before appealing to HMCTS.
If discussions with the appellant does not resolve the appeal or the appellant does not agree with your decision they can ask for a review.
In addition when you inform the taxpayer of your decision to uphold the penalty you must also offer a review.
The appellant can also make an appeal to HMCTS before or after a review, but not whilst a review is being carried out.
If we offer a review the taxpayer has 30 days to
- accept the offer or
- notify an appeal to HMCTS.
Failure to take up offer
If they fail to respond within that period
- treat the appeal as agreed
- issue a ‘Conclusion of review’ letter
Review offer accepted
If the taxpayer/agent accepts or asks for a review you should
- write to the appellant within 30 days and
- acknowledge the review request
- explain that you are required by law to confirm our most recent view of the matter
- your view remains as set out in your decision letter of (date) or
- your view now if it has changed.
prepare a report for the review officer on the review stencil, clearly summarising
- the decision the review officer is required to review
- the relevant legislation and guidance
- your reasoning behind your decision
- the taxpayers argument
- the evidence
- highlight the date the review letter was issued and
- refer the case papers immediately to DMB Shipley SA Decision Review Team and
- mark as priority.
Review time limits
It is important that the case is referred to the review team without delay as the reviewing officer must deal with the case within 45 days. The time limit begins as soon as the taxpayer/agent either asks for a review or has accepted our offer of a review.
For more detailed information on the review stage refer to the Appeals, Reviews and Tribunals Guidance chapter 4000+.
Appealing to HMCTS
The appellant may appeal to HMCTS
- at any time between appealing against your decision and accepting a review
- at any time following your latest view of the case following the taxpayer/agents request for a review
- within 30 days of the decision following the review.
The appeal to HMCTS must be in writing from the taxpayer/agent . The appeal form can be obtained by ringing the HMCTS orderline 020 7566 1270. Further information can be obtained from HMCTS.
The appellant can appeal direct to HMCTS without asking for or accepting a review. In these circumstances you should send the papers to the Tribunals Caseworker team, who will prepare the case for tribunal.
Appeal received locally
If you receive a tribunal appeal form you should check that the taxpayer/agent has appealed to HMRC first;
- if yes, pass the appeal to HMCTS
- if no, consider treating this as an appeal to HMRC and contact the appellant to confirm this.
Appeal sent to tribunal during review
An appeal cannot be sent to or heard by HMCTS during a review period. If you discover the appellant has appealed to HMCTS you must notify the HMCTS Processing Centre.
Let them know that
- a review is ongoing and
- they should contact the appellant to advise that the appeal is invalid.
At the same time you should also
- contact the appellant
- their appeal is invalid
- a decision on their case will be made by the reviewer
- they can then appeal to HMCTS if they disagree with the decision of the review.
Withdrawing an appeal
The appellant can at any time withdraw the appeal before it is settled.
When you receive correspondence asking for the appeal to be withdrawn
- if you are content for it to be withdrawn write to the appellant to confirm you accept the withdrawal
- if you are not content for it to be withdrawn write to the taxpayer/agent within 30 days advising that you object.
You can ask appellant to withdraw the appeal if
- the return has not been filed
- you feel they do not have a reasonable excuse.
If the appellant refuses to withdraw the appeal you must write to them and advise that if they wish to continue to dispute the matter they must appeal to HMCTS.