AH0620 - Preparation for Hearing: Review of case

It is important that you conduct a stock-taking of the HMRC case as soon as it seems likely to result in a contentious hearing before the Commissioners. Such a stock-taking exercise could reveal factual areas where further information may be necessary or desirable. It will also highlight any doubts or difficulties on the law and give an early opportunity to take any necessary Head Office advice. Finally, it will enable you to consider any problems of procedure or tactics, again in good time for any necessary Head Office advice to be taken.

Review the case and check that it has been properly dealt with. In particular, confirm that there is nothing which could prejudice the appeal. You should, for instance, confirm that

• no unlawful enquiry has been made, for example a s19A notice was issued after a closure notice was issued
• any HMRC assessment which is under appeal was validly made,
• all the correct notices have been issued
• things have been done within any specified time limit
• confidentiality has not been breached
• any directed surveillance carried out has been properly authorised.

And, most important of all, check that we have a valid appeal listed for hearing by the Commissioners.

It may be appropriate to check on the need for any alternative assessments so that all appeals can, if possible, be brought before the same body of Commissioners and determined at the same time. This might occur where, for example, there is a dispute as to whether a disposal of land falls within Case I of Schedule D, ICTA88/S776 or is liable to Capital Gains Tax. This procedure, which has been approved by the Courts, is not considered to involve double taxation (see Bye v Coren 60TC116 and Lord Advocate v McKenna 61TC688). (See also AH1525 regarding reports to be made to the relevant specialist following the Commissioners' decision where alternative assessments were under consideration).

You may find it helpful to prepare a sub-folder containing copies of the assessments, amendments, notices or determinations which are under appeal and which are to be considered by the Commissioners, together with the appeal(s) and any other documents which will be put before them. You can add to this as your preparation progresses. Prepare a schedule identifying the items under appeal and, where appropriate, the figures in which you will be asking the Commissioners to determine appeals. It will also assist you if you note any special features, for example HMRC assessments made outside the normal time limit. Remember the initial onus of proof as regards assessments outside the normal time limits will be on you.

You must ensure that the issue in dispute is being litigated using the correct procedure. Some matters - for example the grant of capital allowances to a non-trader - can be tested on appeal against the amendment of a claim. By contrast, Schedule E expenses claims are not claims under TMA70/S42. Rather, they are deductions from the emoluments to be assessed (ITECA03/S327). Any dispute relating to a Schedule E expenses claim must therefore be pursued in the context of an appeal against the amendment of the taxpayer’s self-assessment.