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HMRC internal manual

Enquiry Manual

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HM Revenue & Customs
Updated
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Working the enquiry: reviewing earlier years: tribunal hearings

Where you have made discovery assessments for earlier years, the taxpayer may appeal. The success of using the assessment and appeals machinery to reach an eventual settlement including past years depends ultimately on its being known that you are comfortable with proceeding to a tribunal hearing if appropriate. The number of cases actually reaching this stage should be small and you must take time and trouble over them. Detailed instructions about the tribunal hearings are contained in the Appeals, Reviews and Tribunals Guidance (ARTG8000+), and you should ensure that you are familiar with them before taking a case before the tribunal.

For the year(s) under enquiry you should use an information notice under FA08/Sch36/Para1 to obtain information. An appeal against the information notice should be dealt with in accordance with the guidance in the Appeals, Reviews and Tribunals Guide (ARTG7500+).

At the tribunal, the onus is on the appellant to show that the assessment is excessive. The taxpayer may say that the return is accurate and should be used as a basis for settling the appeal. Such a statement is evidence and subject to cross-examination.

You should always take the opportunity to probe openly the records from which the returns were prepared. This is particularly important if the agent gives evidence about the accounts or returns (as he or she may well do during his or her submission) because he or she can then be questioned about balancing figures and their possible meaning. The agent may well be obliged to agree that the returns cannot be relied upon to show the exact profits.

In terms of chances of success in these sorts of hearings, if you are acting reasonably you should have no fears about addressing the tribunal. You must proceed on the basis that the tribunal will not act in an unreasonable manner if you bring and argue reasonable cases before them.