© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
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J2: Challenging VAT decisions
Start of time limits: date of document or date of notification?
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See J2: Challenging direct tax decisions
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Duty to offer a review
"(1) HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under section 83 in respect of the decision.
(2) The offer of the review must be made by notice given to P at the same time as the decision is notified to P.
(3) This section does not apply to the notification of the conclusions of a review." (VATA 1994, s.83A)
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Failure to offer a review does not invalidate decision
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"[37] The conclusion that a failure to offer a review does not affect the validity of a decision or the ability to appeal it obviously leads to the question of what, if any, consequences there would be of a failure to offer a review, and whether Parliament can sensibly be taken to have intended that they should be no sanction. We do not think it is surprising that an obligation placed on a public body such as HMRC does not bring with it an obvious sanction for non-compliance. Parliament simply expects obligations that it places on HMRC to be fulfilled. In practice, any failure to offer a review is highly likely to be remedied when pointed out, and if it was not then an aggrieved taxpayer would in principle have recourse to judicial review proceedings to compel the offer of a review. As already indicated, a failure by HMRC to provide adequate notification of appeal or review rights in the decision letter could also influence the exercise of the FTT’s discretion to admit a late appeal." (HMRC v. NT ADA Ltd [2018] UKUT 59 (TCC), Judges Berner and Falk)
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Appealable matters are decisions​
"(2) In the following provisions of this Part, a reference to a decision with respect to which an appeal under this section lies, or has been made, includes any matter listed in subsection (1) whether or not described there as a decision." (VATA 1994, s.83(2))
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Time limit for acceptance: 30 days
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"(1) HMRC must review a decision if—
(a) they have offered a review of the decision under section 83A, and
(b) P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer." (VATA 1994, s.83C(1))
Extension of time limit before expiry
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"(1) If under section 83A HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended.
[...]
(3) If notice is given the relevant period is extended to the end of 30 days from—
(a) the date of the notice, or
(b) any other date set out in the notice or a further notice.
(4) In this section “relevant period” means—
(a) the period of 30 days referred to in—
(i) section 83C(1)(b) (in a case falling within subsection (1)), or
[...]
(b) if notice has been given under subsection (1) or (2), that period as extended (or as most recently extended) in accordance with subsection (3)." (VATA 1994, s.83D)
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No review if decision already appealed to the tribunal
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(2) But P may not notify acceptance of the offer if P has already appealed to the tribunal under section 83G." (VATA 1994, s.83C(2))
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Right to appeal directly to FTT
See VATA 1994, s.83G, below.
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Right to require review
"(1) Any person (other than P) who has the right of appeal under section 83 against a decision may require HMRC to review that decision if that person has not appealed to the tribunal under section 83G." (VATA 1994, s.83B(1))
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"(3) HMRC must review a decision if a person other than P notifies them under section 83B." (VATA 1994, s.83C(3))
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Time limit: 30 days
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"(2) A notification that such a person requires a review must be made within 30 days of that person becoming aware of the decision." (VATA 1994, s.83B(2))
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Extension of time limit before expiry
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"(2) If under section 83B another person may require HMRC to review a matter, HMRC may within the relevant period notify the other person that the relevant period is extended.
(3) If notice is given the relevant period is extended to the end of 30 days from—
(a) the date of the notice, or
(b) any other date set out in the notice or a further notice.
(4) In this section “relevant period” means—
(a) the period of 30 days referred to in—
(i) section 83C(1)(b) (in a case falling within subsection (1)), or
[...]
(b) if notice has been given under subsection (1) or (2), that period as extended (or as most recently extended) in accordance with subsection (3)." (VATA 1994, s.83D)
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No review if decision already appealed to the Tribunal
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"(4) HMRC shall not review a decision if P, or another person, has appealed to the tribunal under section 83G in respect of the decision." (VATA 1994, s.83C(4))
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“While the appeal against the 14 December 2012 assessment and the request by the taxpayer for a review bore the same date, the notice of appeal was lodged first, sent by email a day before the review request. In those circumstances, the review request was invalid, since a late review cannot take place once an appeal has been made.” (Marshall & Co v. HMRC [2016] UKUT 116 (TCC) §39).
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Late request for review
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"(1) This section applies if—
(a) HMRC have offered a review of a decision under section 83A and P does not accept the offer within the time allowed under section 83C(1)(b) or 83D(3); or
(b) a person who requires a review under section 83B does not notify HMRC within the time allowed under that section or section 83D(3).
(2) HMRC must review the decision under section 83C if—
(a) after the time allowed, P, or the other person, notifies HMRC in writing requesting a review out of time,
(b) HMRC are satisfied that P, or the other person, had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and
(c) HMRC are satisfied that P, or the other person, made the request without unreasonable delay after the excuse had ceased to apply.
(3) HMRC shall not review a decision if P, or another person, has appealed to the tribunal under section 83G in respect of the decision." (VATA 1994, s.83E)
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Nature of a review​
"(1) This section applies if HMRC are required to undertake a review under section 83C or 83E.
(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 reaching the decision, and
(b) by any person in seeking to resolve disagreement about the decision.
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(5) The review may conclude that the decision is to be—
(a) upheld,
(b) varied, or
(c) cancelled." (VATA 1994, s.83F(1) - (3), (5))
Must take account of representations
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"(4) The review must take account of any representations made by P, or the other person, at a stage which gives HMRC a reasonable opportunity to consider them." (VATA 1994, s.83F(4))
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Time limit for conclusion: 45 days unless extension agreed
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(6) HMRC must give P, or the other person, notice of the conclusions of the review and their reasoning within—
(a) a period of 45 days beginning with the relevant date, or
(b) such other period as HMRC and P, or the other person, may agree.
(7) In subsection (6) “relevant date” means—
(a) the date HMRC received P's notification accepting the offer of a review (in a case falling within section 83A), or
(b) the date HMRC received notification from another person requiring review (in a case falling within section 83B), or
(c) the date on which HMRC decided to undertake the review (in a case falling within section 83E)." (VATA 1994, s.83F(6) - (7))
No conclusion within time limit: decision deemed to be 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 the decision is upheld.
(9) If subsection (8) applies, HMRC must notify P or the other person of the conclusion which the review is treated as having reached." (VATA 1994, s.83F(8) - (9))
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Time limit for appealing to FTT
Basic time limit
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"(1) An appeal under section 83 is to be made to the tribunal before—
(a) the end of the period of 30 days beginning with—
(i) in a case where P is the appellant, the date of the document notifying the decision to which the appeal relates, or
(ii) in a case where a person other than P is the appellant, the date that person becomes aware of the decision, or
(b) if later, the end of the relevant period (within the meaning of section 83D).
(2) But that is subject to subsections (3) to (5)." (VATA 1994, s.83G(1) - (2))
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Appeal following review: 30 days
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(3) In a case where HMRC are required to undertake a review under section 83C—
(a) an appeal may not be made until the conclusion date, and
(b) any appeal is to be made within the period of 30 days beginning with the conclusion date.
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(5) In a case where section 83F(8) applies, an appeal may be made at any time from the end of the period specified in section 83F(6) to the date 30 days after the conclusion date. (VATA 1994, s.83G(3), (5))
Appeal following late request for review
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"(4) In a case where HMRC are requested to undertake a review by virtue of section 83E—
(a) an appeal may not be made—
(i) unless HMRC have notified P, or the other person, as to whether or not a review will be undertaken, and
(ii) if HMRC have notified P, or the other person, that a review will be undertaken, until the conclusion date;
(b) any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date;
(c) if HMRC have notified P, or the other person, that a review will not be undertaken, an appeal may be made only if the tribunal gives permission to do so." (VATA 1994, s.83G(4))
Meaning of conclusion date
"(7) In this section “conclusion date” means the date of the document notifying the conclusions of the review." (VATA 1994, s.83G(7))
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- Appealing a decision address to another: time limit runs from when person becomes aware of decision
"[30] The Trust maintains that it is appealing against HMRC's decision in the Isle of Wight case. HMRC accept that the Trust can appeal against that decision but submit that it has not done so and is now out of time. I agree that the Trust could appeal against HMRC's decision dated 3 August 2021, concerning the VAT liability of the supply of locum doctors, in the same way as the Category 3 appellants referred to in the FTT's decision in the Isle of Wight case. HMRC's decision in that case was a decision on the VAT chargeable on the supply of any goods or services which is an appealable matter within section 83(1)(b) VATA. The Trust maintains that is what it has done but I do not accept that.
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[37] 37. If I had not struck out the appeal for want of jurisdiction but had found that the Trust had appealed against HMRC's decision dated 3 August 2021 referred to in the FTT's decision in the Isle of Wight case, I would have refused to admit the appeal on grounds of lateness. The Trust does not have a copy of that decision. Section 83G(1)(a)(ii) provides that a person who does not have a document notifying the decision to which the appeal relates must bring an appeal within 30 days of the date that person becomes aware of the decision. The Trust was clearly aware of HMRC's decision dated 3 August 2021 when it first wrote to HMRC on 27 March 2023, because that letter refers to "the recent First-tier Tribunal (FTT) decision in Isle of Wight NHS Trust & others v HMRC [2023] UKFTT 23" and the decision sets out the text of HMRC's letter of 3 August 2021 in full at [19]. Assuming in the Trust's favour that it first became aware of the Isle of Wight case and HMRC's decision on the day that RSM first wrote to HMRC, the time limit for appealing expired on 26 April 2023. The Trust first lodged its appeal on or shortly after 18 September 2023 which was 145 days after the time for appealing had expired." (Hampshire Hospitals NHS Foundation Trust v. HMRC [2024] UKFTT 748 (TC), Judge Sinfield)
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Late appeal to FTT
"(6) An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if the tribunal gives permission to do so." (VATA 1994, s.83G(6))
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