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HMRC’s new reviews procedure: One year on

26th May 2010
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HMRC has released figures outlining the progress made during the first year of its new reviews procedure. Simon Sweetman assesses the outcome so far.

HMRC has just released figures tracking the progress of its new review system, which has now been in place for 12 months. The idea of the review to offer taxpayers the opportunity to have what HMRC calls ‘disputed tax decisions’ (or what you and I might call ‘disagreements’) considered by an HMRC official; namely one who is out of the management chain for the caseworker who has arrived at that decision. The system does not prejudice the right to go to the tribunal, and requires the review to be completed to a fairly sharp timetable (45 days).

The figures show that unrepresented taxpayers, who presumably are unlikely to have preconceptions about this process, have been comparatively enthusiastic. Of 18,526 reviews conducted to the end of December (i.e. during the first nine months), 81% had been requested by unrepresented taxpayers.

Altogether there have been far fewer requests for reviews than HMRC had expected, with reviews being sought in only something like 1% of cases where HMRC had made a decision.

When the new reviews process was announced, I suspect that HMRC thought it might look like an independent review – but it didn’t look like one to most tax advisers. It seems that most agents either didn’t know about it or decided that there was nothing in it for them or for their clients. Others may have taken the view that there was nothing to lose by trying this out, but there don’t seem to have been very many.

The results make it clear that this has been far from a rubber stamping exercise. It’s important to distinguish between appeals against penalties (most of which are automatic so have had no human input before the review), where about half have resulted in cancellation, and those where the matter is more substantive.

Looking at the non-penalty cases, 76% were upheld up to 31 December; but that means that in nearly one in four cases the original decision was cancelled (14%) or varied (10%). Given that there is no downside to seeking a review, the reluctance to do so begins to seem obtuse. In fact, one well known tax adviser told me that he was able to use it to clear a case that had dragged on for six years.

There is no indication that people who aren’t asking for reviews are going to the tribunal either, with those figures below expectation as well. The moral of the story so far appears to be that if you don’t ask, you won’t get – or more accurately, your clients won’t get.


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