Income Tax and Appeals

Question 1

Under which Act must a potential taxpayer make a return disclosing financial details?

Answer 1

Taxes Management Act 1970 (TMA 1970)

Question 2

What happens if HMRC disagrees with a self-assessment or if there isn’t one?

Answer 2

HMRC issues its own assessment.

Question 3

What Act established the modern tax appeals structure in 2009-10?

Answer 3

Tribunals, Courts and Enforcement Act 2007 (TCEA 2007)

Question 4

What are the two levels of tribunals that hear tax appeals?

Answer 4

First-tier Tribunal and Upper Tribunal

Question 5

How long does a taxpayer have to appeal an HMRC assessment?

Answer 5

30 days by written notice (under ss 31 & 31A TMA 1970)

Question 6

What are the two options for a taxpayer when disputing an HMRC assessment?

Answer 6

Internal review by HMRC or appeal to the First-tier Tribunal (under ss 49A-49I TMA 1970)

Question 7

Who has the burden of proof in a tax appeal?

Answer 7

The taxpayer must prove the HMRC assessment is incorrect (s. 50 TMA 1970, Haythornwaite & Sons Ltd v Kelly (1927))

Question 8

What is the nature of a tax tribunal hearing?

Answer 8

It is an adversarial contest between the taxpayer and HMRC (Wicker v Fraser (1982))

Question 9

Are tax tribunal hearings public?

Answer 9

Yes, but privacy is granted only in “truly exceptional” cases (R&C Comrs v Banerjee (No 2) [2009])

Question 10

Can tax tribunals award legal costs to the winning party?

Answer 10

No general power to award costs, except in “Complex” cases or if a party behaves unreasonably (r. 10 First-tier Tribunal rules)

Question 11

What Act governs further appeals from the Upper Tribunal?

Answer 11

Tribunal Courts and Enforcement Act (TCEA) 2007 (s. 11 for Upper Tribunal, s. 13 for Court of Appeal)

Question 12

What is required for an appeal from the Court of Appeal to the Supreme Court?

Answer 12

Permission from either the Court of Appeal or the Supreme Court (s. 40 CRA 2005)

Question 13

What case established the test for when a tribunal decision is an error of law?

Answer 13

Edwards v Bairstow [1956] – (1) incorrect legal reasoning, or (2) an unreasonable conclusion

Question 14

What reform did Avery Jones propose regarding tax appeals?

Answer 14

Reducing the four levels of tax appeal and awarding legal costs to winning taxpayers

Question 15

What was Chan’s argument about tax rulings?

Answer 15

Taxpayers should have a right to binding pre-transaction rulings from HMRC to stimulate economic activity