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‘Tax Chamber Hearings’: The basics

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17th Apr 2012
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It is now some three years since the Tax Tribunal replaced the general and special commissioners and the VAT and Duties Tribunal. The mechanics of taking an appeal to the Tax Tribunal will, however, still be unfamiliar to many tax practitioners.

Keith Gordon’s ‘Tax Chamber Hearings’, published by Claritax Books and available from the shop@AccountingWEB, is a practical guide to the whole process that has won praise from tribunal judge Anne Redston as “clearly written, well-researched and up to date” and by Robin Williamson as “comprehensive and practical”. In his foreword to the book, Judge Colin Bishopp, president of the Tax Chamber, notes that the book contains “a good deal of useful and informative practical advice, difficult if not impossible to find elsewhere”.

Rule 24: Basic cases

24(1) This rule applies to Basic cases.

24(2) Rule 25 (respondent’s statement of case) does not apply and, subject to paragraph (3) and any direction given by the Tribunal, the case will proceed directly to a hearing.

24(3) If the respondent intends to raise grounds for contesting the proceedings at the hearing which have not previously been communicated to the appellant, the respondent must notify the appellant of such grounds.

24(4) If the respondent is required to notify the appellant of any grounds under paragraph (3), the respondent must do so–

    (a) as soon as reasonably practicable after becoming aware that such is the case; and

    (b) in sufficient detail to enable the appellant to respond to such grounds at the hearing.

Source: 'Tax Chambers Hearings' by Keith Gordon, Claritax Books, 2011

Rule 24

The following extract, beginning with Rule 24 (see right) from the official Tribunal Rules, deals with appeals allocated as “basic cases”. This rule sets out special rules applicable to cases allocated to the Basic case category.

As indicated by the name of the category, Basic cases are those that should be able to be dealt with minimal paperwork.

The usual requirement for HMRC to prepare a Statement of Case (as set out in rule 25) is disapplied. The typical approach is that the parties should simply turn up at the hearing and argue their respective cases at a Tribunal hearing.

Raising new points

However, to ensure that a taxpayer is not caught unawares, if HMRC wishes to raise a new point (ie one not previously communicated to the taxpayer), they must notify the taxpayer of those grounds as soon as is reasonably practicable after becoming aware that they wish to do so and in sufficient detail to enable the taxpayer to respond to such grounds at the hearing (rule 24(4)).

If a taxpayer considers that insufficient notice has been given, then it would be appropriate to ask the Tribunal to give a direction under rule 15(1)(a) that submissions on the additional points should not be permitted. Such an application should be made at the beginning of the hearing (and, if possible, prior warning ought to be given to HMRC).

Where paperwork is more than minimal

Even if HMRC are not proposing to raise new points, it might sometimes be appropriate for taxpayers to be given advance notice of the documents and arguments that HMRC intend to raise at the hearing. The principles were clearly expressed by the Tribunal in Preferred Refrigeration:

“This appeal was classified as a basic case. In such a case either party may bring evidence to the tribunal which has not previously been disclosed to the other party. Where that happens the tribunal will consider whether the other party needs time to consider the evidence or to gather evidence in rebuttal. It helps speed the appeal if papers are disclosed beforehand but it is not a prerequisite to the hearing of the appeal. In this case the papers in the bundle produced by [HMRC] did not contain information or documents which would have taken the Appellant by surprise. It seemed to us that it was not necessary to ensure a fair hearing to adjourn the appeal to let the Appellant comment on the papers [HMRC] produced.”

Case: Preferred Refrigeration Ltd v HMRC [2011] UKFTT 466 (TC)

Reallocation and case management

It should be noted that some cases allocated to the Basic case category will turn out to be more involved than initially appears to be the case. For this reason, the Tribunal can still give directions (as might be more common in Standard and Complex cases). It would therefore seem unnecessary for a party to seek the reallocation of the case to the Standard case category.

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