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HMRC tax tribunal appeals up

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13th Jan 2010
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The number of appeals by taxpayers claiming to be overtaxed or unfairly punished has increased by 14% - and some analysts suggest tougher HMRC penalties are to blame.

Figures obtained by UHY Hacker Young show that the number of cases received by the VAT and Duties Tribunal and the Special Commissioners Tribunal increased from 4,311 in 2007 to 4,897 during 2008.

UHY Hacker Young says that HMRC’s introduction of a new litigation and settlement strategy, under which it pledges to fight a case through the courts rather than negotiate a settlement if it believes it has a strong enough case, has also helped drive up the number of cases heard by the tax tribunals.

“HMRC’s increasingly aggressive approach to tax collection and litigation has resulted in the soaring number of appeals to tax tribunals over the last few years”, said Roy Maugham, tax partner at UHY Hacker Young.

“HMRC seems to be less and less deterred by the cost of litigation. It is now much more prepared to go all the way through the tribunals rather than negotiate a fair settlement with the taxpayer as it used to. It is doubtful whether this is the most effective and pragmatic way to solve problems”, he added.

A spokesperson for HMRC told AccountingWEB: “The increase in appeals is largely linked to a handful of VAT cases. The appeals process is there to help HMRC and taxpayers clarify points of tax law. Our updated powers and litigation and settlement strategy ensures that when the principle being contested is clear and well understood the tax rules are properly enforced."

 

 

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