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HM Revenue and Customs Brief 10/09


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 Issued 16 March 2009

Tribunals Reform – Changes to the tax appeals system and new internal review process


This Revenue & Customs Brief outlines the new tax appeals system and HMRC’s new internal review process, due to be implemented from 1 April 2009.


From 1 April 2009 there will be a major change to the current system of tax tribunals. To coincide with this, HMRC is changing the way it handles disagreements about tax. The new review process will help provide a more consistent approach to the way we seek to resolve disputes with those who disagree with appealable tax decisions made by HMRC.

At the moment, there are three main tribunals which deal with appeals against HMRC decisions. From April, these tribunals will be abolished and replaced by a single Tax Chamber in the First-tier Tribunal which will consider all disputes and hear appeals in relation to both direct and indirect tax.

New Tribunal

The Tribunals, Courts and Enforcement Act 2007 introduced two new bodies, the First-tier Tribunal and the Upper Tribunal. Over time most existing tribunal jurisdictions including the tax tribunals will be transferring into the new bodies. The new system went live on 3 November 2008. These new statutory bodies are administered by the Tribunals Service which is part of the Ministry of Justice.

Both First-tier and Upper Tribunals are divided into 'chambers' where similar types of appeal are heard. On 3 November when appeals formerly heard by the Social Security Appeals Tribunal successfully transferred to the First-tier Social Entitlement Chamber.

Tax appeals will transfer to a new First-tier Chamber, to be known as the Tax Chamber, on 1 April. A right of appeal against decisions of the First-tier Tax Chamber will also be created to a new chamber in the Upper Tribunal to be known as the Finance and Tax Chamber.

The First-tier Tribunal will deal with the vast majority of appeals, apart from a very small number of the most complex appeals that will transfer to the Upper Tribunal at first instance. The Upper Tribunal will mainly deal with appeals against decisions of the First-tier Tribunal. Work within each tier of the tribunal will be organised into specialist chambers, one of which will deal with tax.

The reforms will affect everyone who disagrees with one of our tax decisions and may wish to have it reviewed, or to make an appeal. As part of the reforms, the General Commissioners and Special Commissioners of Income Tax, the Section 706/704 Tribunal and the VAT & Duties Tribunals will be abolished after 31 March 2009 and their existing functions will transfer into the new First-tier Tax Chamber.

Some straightforward appeals will in future usually be dealt with on paper without the need for HMRC or customers to attend a hearing.

Where a hearing is needed the Tribunals Service will arrange this. Most appeals will be heard at one of a national network of tribunal hearing centres.

Internal review

To coincide with tribunal reform, our customers will be entitled to request an internal review of appealable tax decisions. This new legal right to a review will replace reconsiderations and mandatory reviews in indirect taxes (mandatory reviews will remain for decisions about the restoration of seized goods).

Reviews will be optional and will be done by a trained review officer, who has not previously been involved with that decision, who will be able to offer a balanced and objective view. In the vast majority of cases the review officer will be outside the immediate line management chain of the decision maker.

We must complete reviews within 45 days (unless another period is agreed with the customer). If customers do not want a review, or if they do not agree with the result of the review, they can appeal to the tribunal for a decision.

Further information

You can find out more about tribunals reform and internal reviews from the Tribunals Reform Project and more about changes to the tax tribunals from the Tribunals Service website.

About the Author

© Crown Copyright 2009.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.

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Article Published/Sorted/Amended on Scopulus 2009-03-19 10:28:01 in Tax Articles

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