Disputes, Tribunals and Internal Review

2009 has brought wholesale legislative changes to the legal framework within which tax investigation work is carried out. One of the most significant operational differences is the introduction of a more modern Tribunal system for settling disputes between taxpayers and HM Revenue and Customs. New teams have been set up within tax offices for dealing with Tribunal hearings of taxpayer’s appeals made against decisions and determinations made by inspectors and officers of HM Revenue and Customs.

There is an expectation that HM Revenue and Customs will be less willing to accept substandard investigation settlement offers than has perhaps been the case in the past. As they now have dedicated teams with experience in preparing cases for hearing they will be more willing to test the mettle of taxpayers and advisors when settlement terms cannot be reached "amicably".

There are of course professional costs associated with formal hearings of this kind and they can be substantial, if not probative; and in this regard HM Revenue and Customs have an undoubted advantage over the taxpayer. However, the Tribunal system has brought with it a new process known as "Internal Review" which is offered to taxpayers with a view to preventing inappropriate cases proceeding to a formal Tribunal hearing.

In broad terms any taxpayer whose affairs are under enquiry can ask for an Internal Review by an experienced HM Revenue and Customs officer who has not had any previous connection with their case. The articulated intention is to provide an "independent" review process to ensure that case officers are not acting inappropriately or irrationally in relation to the conduct of the enquiry.

Whilst there was considerable suspicion about this process within the profession we can only report upon our own experiences which we have frankly found to be very positive. Enquiries have been closed down as a consequence of cases we have put to "Internal Review".

If all else fails and a Tribunal hearing is unavoidable then Hector Hector are well placed to provide the support you need to prepare your case. We have a wealth of experience in the "courtroom arena" and we know have to properly present papers and evidence. Our lead advisor, Paul Burke, has given evidence in the Court of Appeal and on many occasions in the High Court.