© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
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J1: Appealing direct tax decisions
Right to give notice of appeal to HMRC
Income tax and CGT closure notices, amendments and assessments
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"(1) An appeal may be brought against—
(a) any amendment of a self-assessment under section 9C of this Act (amendment by Revenue during enquiry to prevent loss of tax),
(b) any conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act (amendment by Revenue on completion of enquiry into return),
(c) any amendment of a partnership return under section 30B(1) of this Act (amendment by Revenue where loss of tax discovered), or
(d) any assessment to tax which is not a self-assessment." (TMA 1970, s.31(1))
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Corporation tax closure notices and amendments
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"(3) An appeal may be brought against an amendment of a company's return under sub-paragraph (2) or (2A)." (FA 1998, Sch 18, para 34(3))
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Amendments during enquiry
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"(3) An appeal may be brought against an amendment of a company's self-assessment by an officer of Revenue and Customs under this paragraph.
(4) Notice of appeal must be given—
(a) in writing,
(b) within 30 days after the amendment was notified to the company,
(c) to the officer of the Board by whom the notice of amendment was given." (FA 1998, Sch 18, para 30(3) - (4))
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Corporation tax assessments and discovery determinations
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"(1) An appeal may be brought against any assessment to tax on a company which is not a self-assessment." (FA 1998, Sch 18, para 48(1))
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"The provisions of paragraphs 46 to 48 (assessments: general provisions as to time limits, procedure and appeals) apply to a discovery determination as they apply to an assessment." (FA 1998, Sch 18, para 49)
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Simple assessment (must query first)
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"(3A) In the case of a simple assessment, the right to appeal under subsection (1)(d) does not apply unless and until the person concerned has—
(a) raised a query about the assessment under section 31AA, and
(b) been given a final response to that query." (TMA 1970, s.31(3A))
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IHT determination
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"(1) A person on whom a notice under section 221 above has been served may, within thirty days of the service, appeal against any determination specified in it by notice in writing given to the Board and specifying the grounds of appeal.
(2) Sections 223D, 223G and 223H provide for notification of the appeal to the tribunal." (IHTA 1984, s.222(1) - (2))
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- Transactions in securities: appeal against counteraction notice
"(1) A person on whom a counteraction notice has been served may appeal on the grounds that—
(a) section 684 (person liable to counteraction of income tax advantage) does not apply to the person in respect of the transaction or transactions in question, or
(b) the adjustments directed to be made are inappropriate.
(2) Such an appeal may be made only by giving notice to the Commissioners for Her Majesty's Revenue and Customs within 30 days of the service of the counteraction notice.
(3) On an appeal under this section that is notified to the tribunal, the tribunal may—
(a) affirm, vary or cancel the counteraction notice, or
(b) affirm, vary or quash an assessment made in accordance with the notice.
(4) But the bringing of an appeal under this section does not affect—
(a) the validity of the counteraction notice, or
(b) the validity of any other thing done under or in accordance with section 698 (counteraction notices),pending the determination of the proceedings." (ITA 2007, s.705)
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Start of time limit: date of document or date of notification?
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UT leaves question open
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“Although the FTT discussed the question of the point at which time started to run for this purpose, deciding, at [79], that it was the date of the document giving notice and not the date of notice having been received, the precise point at which time began to run is not material in this appeal. [The taxpayer’s] grounds of appeal included a challenge to the FTT’s finding in this respect, arguing that, on a purposive construction time must run, not from the date printed on the document, but the date when notice is given in accordance with any permissible means. As resolution of this issue is not material to this appeal, and the point was not argued before us, we do not think it would be right for us to come to a decided view. We should say, however, that we should not be taken to have endorsed either the view adopted by the FTT in this respect or the position put forward by [the Taxpayer].” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §27, Judges Berner and Falk).
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HMRC practice: 37 days from date of decision
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“Section 31A(1) TMA provides that a notice of appeal must be given within 30 days of the date of issue of the assessment. Allowing for HMRC’s inability to be precise about which day was the date of issue, and their practice, reflected in their Self-Assessment Manual, of giving 37 days to appeal from the date of issue of the assessment, the date by which an appeal should have been made to have been in time would seem to be certainly no earlier than 20 September 2014 and probably in practice after that date.” (Patrick v. HMRC [2015] UKFTT 508 (TC), §25).
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No appeal before decision issued
"[82] That is extremely clear and the appeal must be after the issue of the assessment. Furthermore it must be sent to the relevant officer of the board. Accordingly the argument that an appeal can simply be sent to HMRC and it can be expected that it would be forwarded to the correct department cannot be correct. Not only are these issues clear from the wording of statute but it would make a nonsense of the statute if taxpayers could lodge pre-emptive appeals sent to any office of HMRC." (Vekaria v. HMRC [2023] UKFTT 288 (TC), Judge Scott)
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Time limit for giving notice to HMRC: 30 days
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Income tax and CGT
"(1) Notice of an appeal under section 31 of this Act must be given—
(a) in writing,
(b) within 30 days after the specified date,
(c) to the relevant officer of the Board." (TMA 1970, s.31A(1))
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Specified date and relevant officer
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"(2) In relation to an appeal under section 31(1)(a) or (c) of this Act—
(a) the specified date is the date on which the notice of amendment was issued, and
(b) the relevant officer of the Board is the officer by whom the notice of amendment was given.
(3) In relation to an appeal under section 31(1)(b) of this Act—
(a) the specified date is the date on which the closure notice was issued, and
(b) the relevant officer of the Board is the officer by whom the closure notice was given.
(4) In relation to an appeal under section 31(1)(d) of this Act (other than an appeal against a simple assessment)—
(a) the specified date is the date on which the notice of assessment was issued, and
(b) the relevant officer of the Board is the officer by whom the notice of assessment was given.
(4A) In relation to an appeal under section 31(1)(d) against a simple assessment—
(a) the specified date is the date on which the person concerned is given notice under section 31AA of the final response to the query the person is required by section 31(3A) to make, and
(b) the relevant officer of the Board is the officer by whom the notice of assessment was given." (TMA 1970, s.31A(2) - (4A))
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Corporation tax closure notices and amendments
"(4) Notice of appeal must be given—
(a) in writing,
(b) within 30 days after the amendment was notified to the company,
(c) to the officer of the Board by whom the partial or final closure notice was given." (FA 1998, Sch 18, para 34(4))
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"(2) Notice of appeal must be given—
(a) in writing,
(b) within 30 days after notice of the assessment was issued,
(c) to the officer of the Board by whom the notice of the assessment was given." (FA 1998, Sch 18, para 48(2))
IHT determination
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"(1) A person on whom a notice under section 221 above has been served may, within thirty days of the service, appeal against any determination specified in it by notice in writing given to the Board and specifying the grounds of appeal.
(2) Sections 223D, 223G and 223H provide for notification of the appeal to the tribunal." (IHTA 1984, s.222(1) - (2))
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Cannot give notice of appeal before assessment issued
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“It is clear that the drafting in sections 31(1)(d) and 31A(4)(b) require an assessment to be in existence at the time the appeal is made…The letter of 15 May 2015 was also given before the Assessments were issued and so does not amount to valid notices of appeal.” (Singh v. HMRC [2017] UKFTT 154 (TC), §§34…36, Judge Hyde).
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Must be sent to the relevant officer
"[40] Moreover, an appeal has not in this case been notified to the “relevant officer of the Board” as required by section 31(1)(c) TMA. The email correspondence in October 2022, to which I have referred, was not addressed to the HMRC officer who issued the Decisions." (Rotaru v. HMRC [2022] UKFTT 80 (TC), Judge Brannan)
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- Taxpayer sending appeal to Tribunal who notify HMRC
"[81] Some six months later, on 27 October 2022, HMRC changed the text of ARTG2440, so that it now reads:
“Where a customer wants to appeal against HMRC's decision, they must send an appeal to HMRC within 30 days of the date they receive our formal decision notice, such as the notice of assessment, amendment, closure notice or determination.
If HMRC receive notification from the Tribunals Service that the customer has sent them an appeal form, the assigned litigator in SOLS should first check with the decision maker to see whether the customer has already appealed to HMRC.
If the customer has not appealed to HMRC then the tribunal does not have jurisdiction to consider the matter. The decision maker will need to write to the customer to inform them and ask them to submit an appeal to HMRC.
The SOLS litigator should also write to the Tribunals Service to update them about the status of the appeal.
If the taxpayer does not submit an appeal to HMRC…the SOLS litigator should apply to the Tribunals Service for the proceedings to be struck out.”
[82] This revised text is in accordance with my own analysis in Flash Film Transport Ltd v HMRC [2019] UKFTT 4 (TC) (“Flash Film”) at [73]-[77]. Although those passages are obiter, they have recently been endorsed in Rotaru v HMRC [2022] UKFTT 80 (TC) (Judge Brannan) at [41].
...
[84] In Flash Film I said that the statute required that the appeal be first given to HMRC and subsequently notified to the Tribunal, adding at [77] that:
“There are also other reasons why appeals have to be made first to HMRC: the Officer receiving the appeal may consider the reasons and change his position, and the appellant has the opportunity to ask for, or accept, a statutory review carried out by a different HMRC Officer. Appeals made first to HMRC may thus be settled between the parties without reference to the Tribunal.”
[85] However, HMRC's position, as set out in the Statement of Case drafted by Mr Butler, was that the Tribunal had the jurisdiction to decide Mr Kensall's appeal against the assessments because on 22 April 2022, he had given the appeal to HMRC. In other words, there was no need for the appeal to be given first to HMRC, and only then notified to the Tribunal. Instead, it was sufficient for a person who had already appealed to the Tribunal, subsequently to give notice of that appeal to HMRC.
[86] Although I remain of the view set out in Flash Film, the Tribunal also has the power to allow a party to amend his grounds of appeal orally at the hearing. In a case such as this, where the parties and the Tribunal have proceeded on the basis that the appellant had validly appealed a decision to the Tribunal, it is clearly in the interests of justice for the Tribunal to exercise its power to allow a late amendment, and I do so.
[87] I thus find that Mr Kensall had a valid appeal before the Tribunal against the assessments, and the Tribunal thus had the relevant jurisdiction." (Kensall v. HMRC [2023] UKFTT 11 (TC), Judge Redston)
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Form of notice of appeal to HMRC
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Not required to state that it is appeal if substance apparent
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“The appellant wrote to HMRC on 5 March 2014. The letter quoted above does not use the word “appeal” but it clearly is an appeal. It requests the penalty be waived.” (Porter v. HMRC [2015] UKFTT 170 (TC), §18).
Generalised complaints about HMRC conduct not sufficient
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"[38] In my judgment, HMRC’s application must be allowed. It is clear to me that the Appellant did not notify his appeal in writing to HMRC as required by section 49D(1) TMA. I cannot construe any of the emails sent by the Appellant to HMRC as a notice of appeal. At best, they are a series of complaints about HMRC’s conduct. I note that HMRC on a number of occasions explained to the Appellant that he needed to appeal to HMRC. In my view, he has not done so. That the Appellant was dissatisfied with HMRC’s handling of his tax affairs was clear. But that is not enough. The closest he came to indicating that he might be appealing to HMRC was in the email of 21 October 2020 when he said:
“I do not trust HMRC's willingness to investigate the above matters and I'd rather present all my evidence in a Tax Tribunal”
[39] However, I do not regard this as the giving of notice of appeal to HMRC. It conveys the impression of an unwillingness to trust HMRC - the substance of the Appellant’s complaints - but does not indicate an intention to appeal to HMRC." (Rotaru v. HMRC [2022] UKFTT 80 (TC), Judge Brannan)
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Notice must specify grounds of appeal
"(5) The notice of appeal must specify the grounds of appeal." (TMA 1970, s.31A(5))
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"(1) This paragraph applies in relation to any appeal under this Schedule.
(2) The notice of appeal shall specify the grounds of appeal." (FA 1998, Sch 18, para 92)
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Querying a simple assessment
"(1) This section applies where a person has been given notice of a simple assessment.
(2) The person may query the simple assessment by notifying HMRC of—
(a) a belief that the assessment is or may be incorrect, and
(b) the reasons for that belief." (TMA 1970 s.31AA(1) - (2))
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Time limit: 60 days
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(3) The person may exercise the power to query the simple assessment at any time within—
(a) the period of 60 days after the date on which the notice of assessment was issued, or
(b) such longer period as HMRC may allow." (TMA 1970 s.31AA(3))
Procedure following query
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"(4) If the simple assessment is queried, HMRC must—
(a) consider the query and the matters raised by it, and
(b) give a final response to the query.
(5) The person may at any time withdraw a query (which terminates HMRC's duties under subsection (4)).
(6) If it appears to HMRC that—
(a) they need time to consider the matters raised by the query, or
(b) further information (whether from the person or anyone else) is required,
HMRC may postpone the simple assessment in whole or part (according to how much of it is being queried by the person).
(7) If the simple assessment is postponed in whole or part, HMRC must notify the person in writing—
(a) whether the assessment is postponed in whole or part, and
(b) if it is postponed in part, of the amount that remains payable under the assessment.
(8) While the simple assessment is postponed the person is under no obligation to pay—
(a) the payable amount specified in the notice of assessment (if the whole assessment is postponed), or
(b) the postponed part of the payable amount so specified (if the assessment is postponed in part).
(9) After considering the query the final response must be to—
(a) confirm the simple assessment,
(b) give the person an amended simple assessment (which supersedes the original assessment), or
(c) withdraw the simple assessment (without replacing it).
(10) HMRC must notify the person in writing of their final response.
(11) This section does not apply to an amended simple assessment given as a final response to the query.
(12) Nothing in this section affects—
(a) a person's right to request an explanation from HMRC of a simple assessment or the information on which it is based, or
(b) HMRC's power to give a person such explanation or information as they consider appropriate,
whether as part of the querying process under this section or otherwise.
(13) In subsection (12) “person” means a person who has been given notice of a simple assessment." (TMA 1970 s.31AA(4) - (13))
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TMA procedure applies to all appeals under Taxes Acts (unless context otherwise requires)
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"(1) In the following provisions of this Part of this Act, unless the context otherwise requires—
(a) “appeal” means any appeal under the Taxes Acts;
(b) a reference to notice of appeal given, or to be given, to HMRC is a reference to notice of appeal given, or to be given, under any provision of the Taxes Acts.
(2) In the case of—
(a) an appeal other than an appeal against an assessment, the following provisions of this Part of this Act shall, in their application to the appeal, have effect subject to any necessary modifications, including the omission of sections 54A to 54C and 56 below;
(b) any proceedings other than an appeal which, under the Taxes Acts, are to be subject to the relevant provisions of this Part of this Act, the relevant provisions—
(i) shall apply to the proceedings as they apply to appeals;
(ii) but shall, in that application, have effect subject to any necessary modifications, including (except in the case of applications under section 55 below) the omission of section 56 below.
(3) In subsection (2), a reference to the relevant provisions of this Part of this Act is a reference to the following provisions of this Part, except sections 49A to 49I and 54A to 54C." (TMA 1970, s.48)
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TMA procedure applies to NICs appeals
“(1) In this regulation reference to a section alone is reference to the section so numbered in the Management Act.
(2) For the purposes of these regulations, sections 49A to 49I of the Management Act shall apply to appeals with the following modifications--
(a) in section 49A(4) for "in accordance with section 54" substitute "in accordance with regulation 11 of the Social Security Contributions (Decisions and Appeals) Regulations 1999",
(b) in section 49C(4) for "agreement in writing under section 54(1)" substitute "agreement under regulation 11 of the Social Security Contributions (Decisions and Appeals) Regulations 1999",
(c) omit section 49C(5),
(d) in section 49F(2) for "agreement in writing under section 54(1)" substitute "agreement under regulation 11 of the Social Security Contributions (Decisions and Appeals) Regulations 1999",
(e) omit section 49F(3).” (SSCDAR r.7)
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Right to proceed immediately to Tribunal (after notifying HMRC)
"(1) This section applies if notice of appeal has been given to HMRC.
(2) In such a case—
(a) the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see section 49B),
(b) HMRC may notify the appellant of an offer to review the matter in question (see section 49C), or
(c) the appellant may notify the appeal to the tribunal (see section 49D)." (TMA 1970, s.49A(1) - (2))
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"(1) This section applies if notice of appeal has been given to HMRC.
(2) The appellant may notify the appeal to the tribunal.
(3) If the appellant notifies the appeal to the tribunal, the tribunal is to decide the matter in question.
(4) Subsections (2) and (3) do not apply in a case where—
(a) HMRC have given a notification of their view of the matter in question under section 49B, or
(b) HMRC have given a notification under section 49C in relation to the matter in question." (TMA 1970, s.49D(1) - (4))
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"(1) This section applies if notice of appeal has been given to HMRC.
(2) In such a case—
(a) the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see section 223B),
(b) HMRC may notify the appellant of an offer to review the matter in question (see section 223C), or
(c) the appellant may notify the appeal to the tribunal (see section 223D)." (IHTA 1984, s.223A)
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Notifying HMRC first is not optional (cannot notify FTT first)
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“I do not consider that in the Appellant’s circumstances, in the absence of any notification of the appeal to HMRC, the position could have been “cured” as Mr Mason had suggested by treating the (purported) notification of the appeal to HMCTS as though it were an appeal to HMRC. Given the language of s 49D TMA 1970, which requires notice to have been previously given to HMRC, the suggested procedure would amount to “putting the cart before the horse”.” (Thuishyanthan v. HMRC [2016] UKFTT 186 (TC), §35).
"[38] In my judgment, HMRC’s application must be allowed. It is clear to me that the Appellant did not notify his appeal in writing to HMRC as required by section 49D(1) TMA. I cannot construe any of the emails sent by the Appellant to HMRC as a notice of appeal. At best, they are a series of complaints about HMRC’s conduct. I note that HMRC on a number of occasions explained to the Appellant that he needed to appeal to HMRC. In my view, he has not done so..." (Rotaru v. HMRC [2022] UKFTT 80 (TC), Judge Brannan)
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HMRC may offer or Appellant may request internal review
"(1) This section applies if notice of appeal has been given to HMRC.
(2) In such a case—
(a) the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see section 49B),
(b) HMRC may notify the appellant of an offer to review the matter in question (see section 49C), or
(c) the appellant may notify the appeal to the tribunal (see section 49D)." (TMA 1970, s.49A(1) - (2))
No request or offer for review if already notified to Tribunal (or review already requested)
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"(4) The appellant may not notify HMRC that the appellant requires HMRC to review the matter in question and HMRC shall not be required to conduct a review if—
(a) the appellant has already given a notification under this section in relation to the matter in question,
(b) HMRC have given a notification under section 49C in relation to the matter in question, or
(c) the appellant has notified the appeal to the tribunal under section 49D." (TMA 1970, s.49B(4))
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"(7) HMRC may not notify the appellant of an offer to review the matter in question (and, accordingly, HMRC shall not be required to conduct a review) if—
(a) HMRC have already given a notification under this section in relation to the matter in question,
(b) the appellant has given a notification under section 49B in relation to the matter in question, or
(c) the appellant has notified the appeal to the tribunal under section 49D." (TMA 1970, s.49C(7))
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Section 54 agreement possible prior to notifying tribunal
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"(4) This section does not prevent the matter in question from being dealt with in accordance with section 54 (settling appeals by agreement)." (TMA 1970, s.49A(4))
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Appellant requests review
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Stage 1: HMRC to notify their view of the matter
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"(1) Subsections (2) and (3) apply if the appellant notifies HMRC that the appellant requires HMRC to review the matter in question.
(2) HMRC must, within the relevant period, notify the appellant of HMRC's view of the matter in question." (TMA 1970, s.49B(1) - (2))
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"(5) In this section “relevant period” means—
(a) the period of 30 days beginning with the day on which HMRC receive the notification from the appellant, or
(b) such longer period as is reasonable." (TMA 1970, s.49B(5))
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Must notify the Appellant (not person acting on behalf)
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"(2) In sections 49A to 49H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—
(a) notification of HMRC's view under section 49B(2);" (TMA 1970, s.49I(2)(a))
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Stage 2: HMRC must review the matter
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"(3) HMRC must review the matter in question in accordance with section 49E." (TMA 1970, s.49B(3))
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HMRC offer review
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Stage 1: HMRC to notify their view of the matter and offer review
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"(1) Subsections (2) to (6) apply if HMRC notify the appellant of an offer to review the matter in question.
(2) When HMRC notify the appellant of the offer, HMRC must also notify the appellant of HMRC's view of the matter in question." (TMA 1970, s.49C(1) - (2))
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Must notify the Appellant (not person acting on behalf)
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"(2) In sections 49A to 49H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—
[...]
(b) notification by HMRC of an offer of review (and of their view of the matter) under section 49C" (TMA 1970, s.49I(2)(b))
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Stage 2A: If offer accepted, HMRC must review the matter
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"(3) If, within the acceptance period, the appellant notifies HMRC of acceptance of the offer, HMRC must review the matter in question in accordance with section 49E." (TMA 1970, s.49C(3))
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"(8) In this section “acceptance period” means the period of 30 days beginning with the date of the document by which HMRC notify the appellant of the offer to review the matter in question." (TMA 1970, s.49C(8))
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No power to extend acceptance period (apply late appeal provisions)
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“[80] In the present appeal, HMRC accept that they did purport to extend the period for acceptance of the offer. Mr Crawford says that he agreed to an extension. However there is a dispute as to the period of extension.
[81] We have indicated our reservations about determining that evidential issue on the evidence before us. Even if we were to resolve it in favour of Mr Crawford, the position would remain that as a matter of law the acceptance period was 30 days and the Appellant had not accepted the offer of a review or notified the appeal to the tribunal. The Appellant would then require permission to notify a late appeal outside the acceptance period, which it seeks in any event.” (Indigo Media Partnership v. HMRC [2015] UKFTT 424 (TC), Judge Cannan).
Stage 2B: If offer not accepted, Appellant may notify appeal to Tribunal
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"(6) Subsection (4) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under section 49H." (TMA 1970, s.49C(6))
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"(1) This section applies if—
(a) HMRC have offered to review the matter in question (see section 49C), and
(b) the appellant has not accepted the offer.
(2) The appellant may notify the appeal to the tribunal within the acceptance period.
(3) But if the acceptance period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.
(4) If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.
(5) In this section “acceptance period” has the same meaning as in section 49C." (TMA 1970, s.49H)
Stage 2C: If offer not accepted and appeal not notified to Tribunal, HMRC view prevails
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"(4) If the appellant does not give HMRC such a notification within the acceptance period, HMRC's view of the matter in question is to be treated as if it were contained in an agreement in writing under section 54(1) for the settlement of the matter.
(5) The appellant may not give notice under section 54(2) (desire to repudiate or resile from agreement) in a case where subsection (4) applies." (TMA 1970, s.49C(4) - (5))
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Unless late appeal granted
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“[79]…the effect of section 49H(3) is that even after the acceptance period has ended an appellant can notify an appeal to the tribunal if the tribunal gives permission. It is implicit in the scheme of the TMA 1970, if not expressly stated, that in circumstances where the tribunal does give permission then the deemed agreement under section 54 will cease to have effect.” (Indigo Media Partnership v. HMRC [2015] UKFTT 424 (TC), Judge Cannan).
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“We add here that, contrary to HMRCs statement of case, our giving permission to notify late would have undone the s 54 TMA agreement that was deemed by s 49F(2) TMA to have been reached, so what we would have had before us were appeals against the assessments as raised, including those which the reviewing officer had decided should be cancelled.” (Ali v. HMRC [2015] UKFTT 464 (TC), §30).
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- Disagreement is not the same as accepting offer of a review
"[6(4)] On 8 December 2021, within 23 minutes of receiving HMRC's email of 8 December 2021, the Appellant's representative sent an email which stated:
"You say your view has not changed but you have failed to respond at all to any of the points we have raised in our email dated 9/7/21.
So is this how you intend matters to progress, that is, you simply ignore the points we have raised and carry on regardless?
No wonder we have raised a complaint in this case and if this is the best you can do, we are raising another complaint as this response is completely unacceptable.
… please reply by 22 January 2022. If you can't reply by this date, then let us know."
...
[52] In any event, the email of 8 December 2021 from the Appellant's representative could not, in our view, be regarded as the acceptance of HMRC's offer of a review. It was a somewhat belligerent reply (no doubt expressing the Appellant's representative's frustration with HMRC) to HMRC and seems impossible to interpret it as the acceptance of the offer of an internal review.
[53] We also reject Mr Browne's submission that its representative simply failed to state the method of review to be chosen. There was no choice on offer – there are no different methods of review. If the Appellant had notified HMRC of acceptance of the offer of a review under section 49C(3) TMA, HMRC would have been under an obligation to review the matter in accordance with section 49E TMA. It did not do so." (Cranham Sports LLP v. HMRC [2024] UKUT 209 (TCC), Judges Ramshaw and Brannan)
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HMRC review
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Extent of review to be what appears appropriate
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"(1) This section applies if HMRC are required by section 49B or 49C to review the matter in question.
(2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.
(3) For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—
(a) by HMRC in deciding the matter in question, and
(b) by any person in seeking to resolve disagreement about the matter in question." (TMA 1970, s.49E(1) - (3))
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Criticism of HMRC approach
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“this review in effect says nothing other than ‘we are right and you are wrong’. We feel that taxpayer confidence in the statutory system of HMRC internal reviews…requires better performance than that in the current case” (Alexandra Countryside Investments Ltd v. HMRC [2013] UKFTT 348 (TC), §34, Judge Kempster).
Appellant's representations must be considered
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"(4) The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them." (TMA 1970, s.49E(4))
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Outcome must be notified within 45 days (unless extension agreed)
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"(5) The review may conclude that HMRC's view of the matter in question is to be—
(a) upheld,
(b) varied, or
(c) cancelled.
(6) HMRC must notify the appellant of the conclusions of the review and their reasoning within—
(a) the period of 45 days beginning with the relevant day, or
(b) such other period as may be agreed.
(7) In subsection (6) “relevant day” means—
(a) in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC's view of the matter in question,
(b) in a case where HMRC offered the review, the day when HMRC received notification of the appellant's acceptance of the offer." (TMA 1970, s.49E(5) - (7))
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Must notify the Appellant (not person acting on behalf)
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"(2) In sections 49A to 49H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—
[...]
(c) notification of the conclusions of a review under section 49E(6)" (TMA 1970, s.49I(2)(c))
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If review outcome deadline not met, HMRC must notify appellant that HMRC decision is upheld
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"(8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the review is to be treated as having concluded that HMRC's view of the matter in question (see sections 49B(2) and 49C(2)) is upheld.
(9) If subsection (8) applies, HMRC must notify the appellant of the conclusion which the review is treated as having reached." (TMA 1970, s.49E(8) - (9))
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Must notify the Appellant (not person acting on behalf)
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"(2) In sections 49A to 49H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—
[...]
(d) notification of the conclusions of a review under section 49E(9)" (TMA 1970, s.49I(2)(d))
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Right to notify appeal to Tribunal
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"(1) This section applies if—
(a) HMRC have given notice of the conclusions of a review in accordance with section 49E, or
(b) the period specified in section 49E(6) has ended and HMRC have not given notice of the conclusions of the review.
(2) The appellant may notify the appeal to the tribunal within the post-review period.
(3) If the post-review period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.
(4) If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question." (TMA 1970, s.49G(1) - (4))
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Time limit: 30 days
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(5) In this section “post-review period” means—
(a) in a case falling within subsection (1)(a), the period of 30 days beginning with the date of the document in which HMRC give notice of the conclusions of the review in accordance with section 49E(6), or
(b) in a case falling within subsection (1)(b), the period that—
(i) begins with the day following the last day of the period specified in section 49E(6), and
(ii) ends 30 days after the date of the document in which HMRC give notice of the conclusions of the review in accordance with section 49E(9)." (TMA 1970, s.49G(5))
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Extension must be agreed before the 45 days expires
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"[44] In our view, the natural reading of the relevant provisions is that HMRC must issue their statutory review within the 45 day period, unless before the expiry of that period, the appellant has positively agreed to an extension of time and not simply failed to respond. We come to that conclusion for the following reasons:
(1) It is a matter of “central importance” when interpreting legislation to identify the purpose of the provision in question. That exercise must be carried out “in the context of the statute as a whole”; this in turn must take into account the “historical context” and “the general scheme by which [the purpose] is to be put into effect”, see Rossendale Borough Council v Hurstwood Properties Ltd [2021] UKSC 16 at [10].
(2) Section 49E is part of suite of provisions introduced into the TMA by the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009, which coincided with the introduction of the Tribunal which replaced the General and Special Commissioners. The new provisions introduced a stepped sequential approach to appeals and reviews which is marked throughout by time limits. In particular:
(a) Section 49C provides that unless an appellant accepts the review offer within 30 days, the decision under appeal is deemed to have been settled by agreement under TMA s 54; the appellant cannot resile from that deemed agreement.
(b) Section 49F similarly provides that if an appellant does not notify its appeal to the Tribunal within 30 days of the review conclusion, the parties are deemed to have settled the matter by agreement under TMA s 54 on the basis of the conclusions of that review decision, and the appellant cannot resile from that deemed agreement.
(c) These strict time limits can only be displaced if the Tribunal gives permission for the appeal to be notified late, see TMA s 49H(3) and s49G(3)
(3) The deeming provision in TMA s 49E(8) is automatically triggered if HMRC do not give notice of their conclusions within the 45 day period or within “such other period as may be agreed”. If it were possible for HMRC retrospectively to agree a longer period with the appellant, the effect would be to unwind that deemed decision. This would be a surprising outcome, particularly in the light of the finality imposed on the appellant if other time limits are missed.
(4) The wording of TMA s 49E(6) can be contrasted with the flexibility provided by s 49B(5), which provides that the date for HMRC to notify an appellant of its view of the matter is either 30 days from the date on which the appellant asks for the review or “such longer period as is reasonable”. TMA s 49E does not allow HMRC to take “such longer period as is reasonable”; instead, the longer period must be “agreed” with the appellant.
(5) Our understanding of TMA s 49E is supported by the Explanatory Notes to the Order, which say that where HMRC do not give notice of the review conclusions within the time specified, subsection (8) “finalises the review…ensuring that the taxpayer may notify their appeal to the tribunal once that period of time has passed, and providing a basis on which to do so”. If it were possible for HMRC retrospectively to seek agreement to a longer time period, that finality would not be achieved.
(6) Similarly, it is not possible for HMRC simply to write and say (as happened in this case) that “Unless I hear to the contrary from you, I will assume that you have no objection to the review period being extended”. That is because:
(a) HMRC cannot know for sure that there is an agreement: the letter could have been lost in the post or the email could have gone into spam.
(b) Under the law of contract it is well-established that the silence of one party does not bring about an agreement, see Chitty on Contracts, Volume 1, Part 2, Chapter 4(3)(f).
(7) HMRC’s published view also indicates that positive agreement is required: their Appeals Reviews and Tribunals Guidance at ARTG4850 says that officers should make contact “by phone if possible and negotiate an extension to the review period”." (Buckingham v. HMRC [2023] UKFTT 358 (TC), Judge Redston)
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HMRC decision upheld if appeal not notified to Tribunal following review conclusion
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"(1) This section applies if HMRC give notice of the conclusions of a review (see section 49E(6) and (9)).
(2) The conclusions are to be treated as if they were an agreement in writing under section 54(1) for the settlement of the matter in question.
(3) The appellant may not give notice under section 54(2) (desire to repudiate or resile from agreement) in a case where subsection (2) applies.
(4) Subsection (2) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under section 49G." (TMA 1970, s.49F)
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Unless late appeal granted
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See above: HMRC offer a review
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HMRC erroneously offering right to resile ineffective
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"At the time the October Documents were issued there had been no application to the Tribunal for permission to notify appeals against the review decisions after the 30 day time limit. The text of those Documents therefore correctly stated that the appeals had been settled under TMA s 54, because they were deemed to have been so settled by TMA s 49F(2). However, the October Documents were incorrect to say that Mr Miah had any right to resile from that settlement, because that right is removed by s 49F(3).
64. I agree with Ms Davies that the October Documents could not, in law, have been new discovery assessments with their own rights of appeal, because:
(1) they relate to exactly the same issues as the original assessments made in January 2019, and it is not possible “on two separate occasions to raise assessments on the basis of the one discovery”, see Tooth cited earlier;
(2) TMA s 30A(4) provides that assessments can only be amended “in accordance with the express provisions of the Taxes Acts”, and there is no such provision operating here;
(3) although Mr Rippon sought to rely on HMRC’s care and management powers, those powers do not extend to issuing an assessment. Instead, as Lord Hoffman said in R (oao Wilkinson) v HMRC [2005] 1 WLR 1718 at [21]:
“This [care and management] discretion enables the commissioners to formulate policy in the interstices of the tax legislation, dealing pragmatically with minor or transitory anomalies, cases of hardship at the margins or cases in which a statutory rule is difficult to formulate or its enactment would take up a disproportionate amount of parliamentary time.”
65. If the discovery assessments had been new decisions, they would have required Mr Miah to appeal to HMRC, see TMA s 31(1A) cited at §47. Ms Rahman did not do that. She instead filed a Notice of Appeal with the Tribunal, and copied that Notice to HMRC. The Tribunal has no jurisdiction to hear an appeal that has not first been made to HMRC, see Flash Film Transport Ltd v HMRC [2019] UKFTT 4 (TC) at [73]-[77], recently confirmed in Rotaru v HMRC [2022] UKFTT 80." (Miah v. HMRC [2022] UKFTT 228 (TC), Judge Redston)
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No time limit on notification to FTT if HMRC do not offer review
“Although both parties made their submissions on the basis that the appeal had been notified late, and during the hearing we gave permission for the appeal to proceed on that basis, we now formally record that this was not the position. Because s 49D(2) does not have a time limit, the notification was not late, so no permission was needed.” (Bediako v. HMRC [2016] UKFTT 280 (TC), §18).
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Notices must be in writing
"(1) In sections 49A to 49H—
[...]
(b) a reference to a notification is a reference to a notification in writing." (s.49I(1)(b))
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Form of notice to Tribunal
“(1) A person making or notifying an appeal to the Tribunal under any enactment must start proceedings by sending or delivering a notice of appeal to the Tribunal.
(2) The notice of appeal must include--
(a) the name and address of the appellant;
(b) the name and address of the appellant's representative (if any);
(c) an address where documents for the appellant may be sent or delivered;
(d) details of the decision appealed against;
(e) the result the appellant is seeking; and
(f) the grounds for making the appeal.
(3) The appellant must provide with the notice of appeal a copy of any written record of any decision appealed against, and any statement of reasons for that decision, that the appellant has or can reasonably obtain.” (FTT Rules, r.20(1) – (3)).
Undesirable not to use official Notice of Appeal form
“…we regard it as undesirable for any appeal or application to be notified to HMC&TS without completion of the required Notice of Appeal form. The exercise of completing that form is intended to ensure that all relevant information is provided to HMC&TS, and ultimately to the Tribunal, so that proper account can be taken of that information for the purposes of the appeal or application. In particular, the Tribunal needs to have a clear statement of the grounds of appeal or the grounds for the application.” (Alkadhi v. HMRC [2012] UKFTT 741 (TC), §8).
HMRC cannot notify appeal to Tribunal for taxpayer
“We would like to emphasise the need to follow the proper procedure in these matters. It is not sufficient, where making an appeal or application to the Tribunal, to notify HMRC, and it is not appropriate for HMRC to notify HMC&TS of any appeal or application on behalf of a taxpayer. The taxpayer should notify his appeal to HMC&TS.” (Alkadhi v. HMRC [2012] UKFTT 741 (TC), §8).
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Strike out for refusal to provide address
“I place no reliance on the provision of the Dublin address or the c/o address in Scotland given the history of these appeals. For the reasons given the email address is patently unreliable. I therefore direct that given his failure to comply in regard to provision of an address where documents could be served the Work appeal should be struck out on that basis.” (Allen v. HMRC [2016] UKFTT 571 (TC), §130).
No appeal without identifying decision appealed against
“We note that the Appellant’s first Notice of Appeal pre-dates that “decision” and that its subsequent amendment to the grounds of appeal (raising the issue of a possible input tax claim) was made after March 2010 but does not refer to an appeal against a specific decision. The Appellant’s second Notice of Appeal was filed after March 2010 but also does not refer to a specific decision. In the circumstances we conclude that there is no determinable appeal before us in relation to that issue and that we have no jurisdiction to decide, in the context of the present appeals, whether the Appellant is entitled in the future to make an input tax claim.” (Franck & Tobiesen (UK) Ltd v. HMRC [2013] UKFTT 648 (TC), §29).
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CGT valuation decisions that affect more than one person
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Right of non-party to apply to be joined in existing appeal re valuation
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"(1) Where the market value of an asset on a particular date or the apportionment of any amount or value is a material question in an appeal any person whose liability to capital gains tax for any period may be affected by that market value or by the manner in which that amount or value is apportioned may apply under this Regulation to be joined as a party in the appeal.
(2) An application under this Regulation to be joined as a party in an appeal shall be made in writing to an officer of Revenue and Customs stating—
(a) the name and address of the applicant;
(b) the question which may affect his liability to capital gains tax;
(c) how his liability may be affected; and
(d) his contention with regard to that question.
(3) The officer shall send a copy of the application to the appellant and to any other party to the appeal." (SI 1967/149, r.8(1) - (3) effective under TMA 1970, s.57)
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HMRC or FTT to decide on joinder
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"(4) If the application is received by the officer before the appeal has been notified to the tribunal, the officer shall, if satisfied that it is proper to join the applicant as a party in the appeal, join the applicant as a third party and give notice of the joinder to the appellant and any other party to the appeal.
(5) If the application is received by the officer after the appeal has been notified to the tribunal, or the officer is not satisfied that it is proper to join the applicant as a party in the appeal, the officer shall refer the application to the tribunal, which may at its discretion allow or refuse the application." (SI 1967/149, r.8(4) - (5))
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Joined third party has same rights as appellant
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"(7) At the hearing and on the determination of the appeal or of any question in the appeal a third party shall, so far as relates to the question in which he is interested, have the same rights as an appellant, including any right to require the statement of a case for the opinion of any Court." (SI 1967/149, r.8(7))
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Right of either taxpayer to apply to FTT for determination if no existing appeal
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"(1) Where the market value of an asset on a particular date or the apportionment of any amount or value may affect the liability to capital gains tax for any period (and whether for the same or different periods) of two or more persons and is not (and has not been) a material question in an appeal already brought by any of them, any of those persons may apply to the tribunal to determine that market value or the manner in which that amount or value should be apportioned.
(2) An application under this Regulation shall be made by notice in writing sent to an officer of Revenue and Customs stating the question for determination and (to the best of the applicant's knowledge) the names and addresses of the other persons whose liability to capital gains tax may be affected by the question." (SI 1967/149, r.9(1) - (2))
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HMRC power to notify third party
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"Where it appears to the inspector that a person is entitled to apply to be joined as a third party in an appeal the inspector may, and at that person's request shall, notify him of the appeal and disclose to him (so far as relevant to his interest in that appeal) the market value of any asset or the apportionment of any amount or value used in making the assessment or decision from which the appeal is brought." (SI 1967/149, r.16)
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Conclusive effect of appeal (even on persons who could have joined but did not)
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"(1) Where the market value of an asset on a particular date or the apportionment of any amount or value (being a market value or apportionment affecting or which may affect the liability to capital gains tax of two or more persons) is finally determined on an appeal that determination shall, subject to Regulation 14, be in all proceedings relating to capital gains tax conclusive between the Board or any officer of the Board and the following persons—
(a) parties to the appeal; and
(b) any person who was entitled to apply to be joined as a third party in the appeal, and had notice, in reasonable time for making such application, of the appeal and of the question in the appeal entitling him so to apply, not being a person who did so apply without undue delay and whose application was not allowed.
(2) For the purposes of these Regulations—
(a) the determination of an appeal or a question in an appeal shall be treated as final when the determination can no longer be varied by the tribunal making it or by the order of any court;
(b) the market value of an asset on a particular date or the apportionment of any amount or value shall be deemed to have been finally determined on an appeal notwithstanding that there was no dispute concerning that market value or apportionment if the market value or apportionment was a material question in the appeal and the appeal has been finally determined." (SI 1967/149, r.11(1) - (2))
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Conclusive effect of agreement by all parties to appeal (even on persons who could have joined but did not)
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"(1) An agreement or notification which apart from this Regulation would have effect under section 54 of the Taxes Management Act 1970 (settlement of appeals by agreement or withdrawal) as if an appeal had been determined by the tribunal shall not have that effect in relation to any appeal in which a third party has been joined unless, at the time when such agreement is made or notification is given, the question in which the third party is interested has been finally determined on the appeal or disposed of by an agreement made in accordance with paragraph (2) below.
(2) Where the market value of an asset on a particular date or the apportionment of any amount or value may affect the liability to capital gains tax of two or more persons and is a material question in an appeal, then if the market value or apportionment is agreed in writing between an officer of the Board and all the parties to the appeal whose liability may be affected by it the agreement shall in all proceedings relating to the capital gains tax be conclusive between the Board or any officer of the Board and the following persons—
(a) parties to the agreement; and
(b) any person who was entitled, in respect of the question in the appeal to which the agreement relates, to apply to be joined as a third party in the appeal, and had notice of the appeal and of the question in the appeal not less than thirty days before the agreement was made, not being a person who did so apply before the agreement was made.
(3) A document purporting to be an agreement made in accordance with paragraph (2) above and produced from proper custody may be received in evidence in any proceedings relating to capital gains tax without further proof as such an agreement made by the persons by whom it purports to be signed." (SI 1967/149, r.13(1) - (3))
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IHT appeals may be notified to High Court or UT (Land Chamber)
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- Notification to High Court by agreement
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"(3) Where—
(a) it is so agreed between the appellant and the Board, or
(b) the High Court, on an application made by the appellant, is satisfied that the matters to be decided on the appeal are likely to be substantially confined to questions of law and gives leave for that purpose,
the appeal may be notified to the High Court.
...
(4ZA) The appeal may be notified under subsection (3) or (4) only if it could be notified to the tribunal under section 223D, 223G or 223H.
(5) In the application of this section to Scotland, for references to the High Court there shall be substituted references to the Court of Session." (IHTA 1984, s.222(3) - (4ZA))
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- Value of land issue notified to Upper Tribunal
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(4) An appeal on any question as to the value of land in the United Kingdom may be notified to the appropriate Tribunal.
(4ZA) The appeal may be notified under subsection (3) or (4) only if it could be notified to the tribunal under section 223D, 223G or 223H.
(4A) If and so far as the question in dispute on any appeal under this section which has been notified to the tribunal or the High Court is a question as to the value of land in the United Kingdom, the question shall be determined on a reference to the appropriate tribunal.
(4B) In this section “the appropriate tribunal” means—
(a) where the land is in England or Wales, the Upper Tribunal;
(b) where the land is in Scotland, the Lands Tribunal for Scotland;
(c) where the land is in Northern Ireland, the Lands Tribunal for Northern Ireland.
(5) In the application of this section to Scotland, for references to the High Court there shall be substituted references to the Court of Session." (IHTA 1984, s.222(4) - (5))
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