AH1885 - Special Commissioners: Appeals to The High Court: Adjustments following Commissioners' decision

Decision of Commissioners favourable to HMRC

Where an Appellant’s Notice has been lodged in the High Court in connection with an appeal against an assessment etc, tax should be paid in accordance with the determination of the Commissioners pending the High Court hearing (TMA70/S56(9) and S56A(8)) .

This does not apply in the case of an amendment to a return under TMA70/S28A at the close of an enquiry.

But if the appeal relates to an assessment of one of the types covered by TMA70/S55 (1), the most common of which are:-

• an amendment of a self-assessment during an enquiry to prevent loss of tax
• an assessment to tax other than a self-assessmentan
• payments)

amend the assessment in accordance with the Commissioners’ determination.

Decision of Commissioners adverse to HMRC

Where the decision of the Commissioners is adverse to HMRC the appellant may request a refund of tax paid in excess of the amount due in accordance with the Commissioners' determination. The question of whether or not a repayment can be made pending the High Court hearing turns on the nature of the proceedings. Tax overpaid should be repaid in accordance withTMA70/S55(9) if the appeal relates to an assessment of one of the types covered by TMA70/S55 (1) (see above).

In any other case, repayment of tax in accordance with the determination is not due in law. This applies in particular to an adverse decision on an amendment to a return under TMA70/S28A and to an amendment to a claim outside a return under TMA70/SCH1A/PARA7(2) at the close of an enquiry .

In practice, however, you may normally make repayment if the taxpayer gives a suitable undertaking in writing. The terms of the undertaking should be that, in consideration of HMRC's repaying a specified amount in accordance with the Commissioners' determination, even though the tax remains in dispute by reason of the demand for a stated case, he will refund a specified amount to HMRC if the Commissioners' determination is reversed. Do not follow this course if the taxpayer is or may become non-resident, or if there is any reason to suspect that the undertaking may not be honoured. If you receive a request for repayment in such a case seek advice from Central Policy: Tax Administration Policy.