Disagree with a tax decision

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1. Overview

HM Revenue and Customs (HMRC) will send you a decision letter that will tell you if you can appeal against a tax decision.

You can appeal against some decisions about:

  • your tax bill (for example Income Tax, Corporation Tax, VAT)
  • a claim for tax relief
  • a request for information or to check your business records
  • a penalty (for example if you paid your tax late or filed your tax return late)

Your appeal can be made by someone who deals with your taxes, for example an accountant.

You’ll usually have to pay your own costs if you appeal against a tax decision. You may be able to delay the payment of a penalty or any tax you owe until your appeal’s been resolved.

This guide is also available in Welsh (Cymraeg).

If you need help

You can contact HMRC if you have a query about a tax decision.

If you do not understand the decision you can also get advice from HMRC or professional help.

If HMRC did not act on information

You may be able to ask HMRC to cancel tax you owe. You can only do this if HMRC did not act on information that you, your employer or the Department for Work and Pensions (DWP) gave them.

You can ask HMRC if you owe:

  • Income Tax, for example because you were on the wrong tax code
  • Capital Gains Tax
  • Class 4 National Insurance contributions

2. Appeal against a tax decision

HM Revenue and Customs (HMRC) will write to tell you if you can appeal against a tax decision.

How you appeal against a decision depends on if it’s direct or indirect tax.

Direct tax includes:

  • Income Tax
  • PAYE tax
  • Corporation Tax
  • Capital Gains Tax
  • National Insurance contributions
  • Inheritance Tax

Indirect tax includes:

  • VAT
  • Excise Duty
  • Customs Duty
  • environmental taxes such as Plastic Packaging Tax, Landfill Tax or the Climate Change Levy

Appeal against a direct tax decision

Your decision letter will tell you how to make an appeal and when you must appeal by. The deadline is usually 30 days from the date of the letter.

You can either:

  • use the appeal form you got with your decision letter
  • write to HMRC at the address on the letter

If you do not have a letter you can write to the HMRC office related to your return.

You must include:

  • your name or business name
  • your tax reference number (this will be on the decision letter)
  • what you disagree with and why

You can also include what you think the correct figures are and how you’ve calculated them if you like.

You should also tell HMRC if you have any extra information or if you think they’ve missed something.

After you send your appeal

The case worker who made the decision will look at your case again and consider your appeal.

If they do not change their decision after this, you’ll be offered a review. This is where the decision is looked at by someone at HMRC who was not involved in the original decision.

You can accept the offer of a review or appeal to the tax tribunal.

Reviews are usually quicker than appeals to the tax tribunal.

You’ll have 30 days from the date of the review offer to accept the offer of a review.

Appeal against an indirect tax decision

You’ll be offered a review by HMRC in its decision letter. You can either accept the offer of a review or appeal to the tax tribunal.

You’ll have 30 days from the date of the decision to accept the offer.

If customs has seized your things, you can ask for them back.

3. Appeal against a penalty

You can appeal to HM Revenue and Customs (HMRC) against a penalty, for example for:

  • an inaccurate return
  • sending in your tax return late
  • paying tax late
  • failing to keep adequate records

How you appeal depends if the penalty is for either:

  • indirect tax, for example VAT, Customs Duty or Excise Duty
  • direct tax, for example Income Tax, Corporation Tax or Capital Gains Tax

Your penalty may be cancelled or amended if you have a reasonable excuse.

How to appeal against an indirect tax penalty

You’ll be offered a review by HMRC in your penalty decision letter.

You can either accept the offer of a review or appeal to the tax tribunal.

How to appeal against a direct tax penalty

You’ll need to ask HMRC to look at your case again and consider your appeal.

If HMRC sends you a penalty letter by post, use the appeal form that comes with it or follow the instructions on the letter.

For Self Assessment, PAYE, VAT and Corporation Tax, there are extra documents you can use or alternative ways to appeal.

If you’re appealing against a Self Assessment penalty

If you’ve been charged a penalty for not sending a tax return but you do not need to send one, ask HMRC to cancel it. You can either:

If you’re appealing a penalty for a late tax return or late payment, how you appeal depends on whether:

You’ll need:

  • the date the penalty was issued
  • the date you filed your Self Assessment tax return
  • details of your reasonable excuse for late filing

Only the nominated partner can appeal a penalty for a partnership tax return.

You can also appeal by sending a letter to HMRC:

Self Assessment
HM Revenue and Customs
BX9 1AS
United Kingdom

If you’re an employer appealing against a PAYE penalty

You can appeal online if you’re registered for HMRC’s PAYE for employers service. Once you’ve logged in, select ‘Appeal a penalty’. You’ll get an immediate acknowledgment when you submit your appeal.

If you filed a late VAT or Corporation Tax return

You can also use these specific forms for:

If you do not have an appeal form

You can send a signed letter to HMRC instead. You must include a full explanation of why your return or payment was late, including dates.

Also include in your letter:

  • your name
  • your reference number - for example your Self Assessment Unique Taxpayer Reference (UTR) or VAT registration number

If you could not file or pay because of computer problems, you should include the following:

  • the date you tried to file or pay online
  • details of any system error message

Send your claim to the HMRC office related to your return.

Deadlines

You usually have 30 days from the date your penalty was issued to appeal.

If you miss this deadline you must explain the reason for the delay so that HMRC can decide if they’ll consider your appeal.

Getting a review

If HMRC do not change the decision and you still disagree, you’ll be offered a review.

4. Get a review of a tax or penalty decision

If you disagree with a tax or penalty decision, you can either:

  • accept the offer of a review by HM Revenue and Customs (HMRC) and then appeal to the tax tribunal if you’re still not satisfied
  • appeal directly to the tax tribunal

Reviews by HMRC are usually quicker than appeals to the tax tribunal.

You must appeal to HMRC first if you’re challenging a direct tax decision or a direct tax penalty.

If you accept a review by HMRC

You will have your tax decision reviewed by someone at HMRC who was not involved in the original decision. This is known as a ‘statutory review’.

HMRC will tell you when you can have a review.

Reviews usually take 45 days, but HMRC will contact you if it will take longer.

HMRC will write to tell you the result of its review.

Appealing to the tax tribunal

You can appeal to the tax tribunal:

  • if you disagree with HMRC’s review decision - you must usually do this within 30 days of the review decision
  • instead of accepting a review by HMRC

You can also consider alternative dispute resolution (ADR), but you need to appeal to the tax tribunal first.

5. Delay payment while appealing

You may be able to delay paying a tax bill or penalty if you disagree with the amount.

Direct tax

If you’ve appealed to HM Revenue and Customs (HMRC) against a direct tax decision (such as Income Tax, Corporation Tax or Capital Gains Tax) write to the HMRC office that sent you the decision, telling them:

  • why you think the amount you’ve been asked to pay is too much
  • what you think the correct amount is and when you’ll pay it

HMRC will tell you in writing if they agree.

Penalty

If you’ve appealed against a penalty you will not have to pay until your appeal has been settled.

Indirect tax

If you’ve asked HMRC to review an indirect tax decision, for example VAT or Insurance Premium Tax, you will not need to pay until the review has finished.

If you appeal to the tax tribunal you’ll usually have to pay the tax before they will hear your appeal. You can ask to delay paying the tax if it would cause you extreme financial difficulty (for example, bankruptcy or liquidation).

Once a final decision has been reached, you must pay any money that you owe in full including interest.

Penalty

If you’ve asked for a review, or appealed to the tribunal about a penalty, HMRC will not ask you to pay it until your appeal has been settled.

If you disagree with HMRC’s decision

You can ask for the decision to be reviewed if you do not agree with the outcome.

6. Reasonable excuses

You can appeal against some penalties if you have a reasonable excuse, for example for your return or payment being late.

What may count as a reasonable excuse

A reasonable excuse is something that stopped you meeting a tax obligation that you took reasonable care to meet, for example:

  • your partner or another close relative died shortly before the tax return or payment deadline
  • you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
  • you had a serious or life-threatening illness
  • your computer or software failed just before or while you were preparing your online return
  • service issues with HM Revenue and Customs (HMRC) online services
  • a fire, flood or theft prevented you from completing your tax return
  • postal delays that you could not have predicted
  • delays related to a disability or mental illness you have
  • you were unaware of or misunderstood your legal obligation
  • you relied on someone else to send your return, and they did not

You must send your return or payment as soon as possible after your reasonable excuse is resolved.

What will not count as a reasonable excuse

The following will not be accepted as a reasonable excuse:

  • your cheque bounced or payment failed because you did not have enough money
  • you found the HMRC online system too difficult to use
  • you did not get a reminder from HMRC
  • you made a mistake on your tax return