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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Default Surcharge: Reviews and appeals: Appeals to a Tribunal

For guidance on how a customer can appeal directly to the tribunal, see ARTG3130.

Once the Tribunals Service receives an appeal from the customer, they allocate it to a category, see ARTG8350, and then notify the HMRC Clearing House, of the appeal, seeARTG8320.

The Clearing House then refers the notification of appeal to the relevant appeals unit to action.

Processing appeals to Tribunal

When the appeals unit receives the notification of appeal, they will

  • review the reasons for the appeal, and if the excuse is accepted, cancel the default and ask the trader to withdraw their appeal
  • make sure the defaults are properly recorded and have been charged at the correct rate, if not, amend the default history if appropriate inform the trader
  • instruct Solicitor’s Office
  • compile the relevant papers and ask the decision maker and, if necessary the review officer, for any further information they require
  • arrange for preparation of witness statements
  • prepare documentary evidence (document bundle - see below) including a schedule of defaults for presentation at the hearing.

Following the tribunal’s decision, the appeal unit will also carry out any necessary follow up action, including telling Tax Administration Advice (TAA) if it is a decision we may wish to appeal against.

Schedule of Defaults

This is produced to show that the defaults have been correctly recorded and documents served according to the law. The schedule details all the defaults up to and including the period under appeal. It must show the

  • date of receipt of all the VAT returns and payments
  • amount of tax paid late
  • surcharge documents issued
  • percentages and amount of surcharges.

It is important that the schedule is completed as follows:

The trader’s name, VAT registration number and Tribunal reference should be written across the top of the document. Other parts of the document should contain the following information

  • Default number - the top box will always be numbered 1. Those below will be numbered consecutively 2, 3, 4, 5, 6 etc.
  • Period dates - should be in words for example 1 December 2009 to 28 February 2010. Non standard period dates can be identified from the VAT 3 NSP facility on VISION and microfilm copies of the VAT 100s.
  • Due date - usually one month from the period end (details on the VAT 3 and microfilm copy of the VAT 100).
  • Date payment received - dates can be taken from VISION or Accounting Interrogation Prints. Generally, payments accompanying returns are noted on the return and allocated the same date of receipt.
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • Type of payment - for example cheque, credit transfer etc.
  • Date return received - this is noted in the official use box of the VAT 100 on receipt.
  • Tax Assessed - the prime assessment amount should be entered in this box. If no assessment has been issued leave the box blank.
  • Tax on Return - the return amount should be entered in this box. If no return has been received leave the box blank.
  • Surcharge Document issued - this column is used to record the issue of surcharge documents, for example VAT 166.
  • Rate - Percentage rate applied to a surcharge assessment.
  • Amount - Amount of surcharge assessment.

Preparation of document bundles for appeals to Tribunal

The papers relevant to the appeal that act as background information for the Advocate and Tribunal Chairman, are known as “The Bundle” and should contain

  • Default surcharge schedule.
  • VAT 100s, details of payments if appropriate and surcharge documents relating to each period of default in date order. The surcharge documents should be inserted either before or after the relevant VAT 100 according to the date of receipt of the VAT 100 and date of issue of the surcharge document.
  • Correspondence between the appellant and HMRC relating to the periods in default.

In preparing the bundle, make sure that all pages are clearly legible copies, and page numbers on the enclosures / schedule are correct.

The Bundle should be sent to Solicitor’s Office by the deadline that they have been given. The notification of the hearing from the Tribunals Service details of any witnesses required should be attached to the front.