COM10040 - Appeals: handling appeals and postponements: appeals received in debt management office

This subject is presented as follows

Appeals against tax charges and postponement applications
Appeals against penalty determinations 

Appeals against tax charges and postponement applications

A company or agent can appeal against an assessment or amendment and apply to postpone payment of tax. In the absence of an application to postpone payment, the tax as charged in the assessment or amendment remains payable in full. 

An appeal and or request for postponement relating to a tax charge should be made

• By the company or its agent
• In writing
• To the responsible office

When an appeal is sent to the Debt Management office, you may need to suspend collection of the liability while you refer to the responsible office. For more information see business area ‘Pursuit’.

You should only suspend collection when you consider that there are valid grounds for the appeal.

Do not suspend collection when

• The appeal is not in writing
• There is no application for postponement of the tax
• The company or agent makes an unsupported claim that a repayment is due
• Collection of the charge has been suspended before
• The liability has been previously stood over and subsequently released
• You or another Debt Management office can answer the query raised
• Correspondence is a duplicate copy of earlier letter to the responsible office and it isclear the responsible office has dealt with the letter
• You consider the correspondence does not constitute a genuine appeal, but is simply a delaying tactic

If you are unsure whether or not to suspend collection

• Consult the Review Officer

A suspension is cancelled automatically by COTAX when

• The time limit expires
• The AP clears before the time limit has expired
• An appeal is recorded

• (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

• There is an event on the AP which changes the circumstances that originally created the suspension

On receipt of an appeal or suspension against a tax charge the responsible office will either

• Stand over or amend the charge

• Use Function RSUD (Cancel Suspension) to cancel the suspension and confirm that collection is to proceed

Any standover or amendment will automatically cancel the suspension.

Note: For a CT Pay and File AP when, exceptionally, no assessment has been made the responsible office cannot stand over the return charge. In these cases, if appropriate, the responsible office will use one of the following functions to reduce the amount of the tax due

• Function ARTA (Amend Returned Tax Amount)
• Function RECB (Record Amounts Carried Back)

When the responsible office postpones collection of a liability, COTAX creates a postponement posting on the company’s record. Function VPPD (View Payment and Posting Details) shows these as follows

• SO - Standover
• ISO - Informal standover
• SOR - Standover release caused by the recording of a return

The Function VPPD summary screen will show these postings under a general heading ‘stood over’. Once a postponement has been recorded on COTAX it is the responsibility of the case owner to actively manage the postponement. For further information on this subject see COM10120.

When a company makes a payment that is more than the non-postponed amount and there is a postponement type posting on the AP, Accounts Office will

• Treat the payment as an overpayment

• Refer the matter to the responsible office

Accounts Office will not reduce the postponement to accommodate the payment.

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Appeals against penalty determinations

A company or an agent may appeal against a penalty. The postponement provisions do not apply. If the penalty is under appeal you cannot continue pursuit.

An appeal against a penalty determination must be made

• By the company or its agent
• In writing
• To the responsible office

On receipt of a valid appeal against a penalty determination, the responsible office will

• Record receipt of the appeal (which will automatically stand over the full amount charged on the determination which remains unpaid)
• Inhibit automatic output for the penalty, if necessary
• Actively manage the standover
• Take action to settle the appeal

The company may claim that

• It has a reasonable excuse for the late delivery of the return

• The amount of the penalty charge is incorrect

For a list of forms relevant to this subject, see COM10041.

For a list of functions to use in particular situations, see COM10042.