Fighting HMRC pays off 'more than half the time'

Almost six in ten challenges against HM Revenue & Customs result in the original decision of the tax officer being altered or cancelled outright, new figures show.

In fact, 57% of cases where a review of the initial tax ruling was run by an unrelated HMRC official found in favour of the taxpayer, show the figures for the year to March 31st 2016.

Obtained by law firm Pinsent Masons, the figures indicate that assuming “your adviser thinks it is sensible, challenging an unfair or disproportionate action by the Revenue is worthwhile”.

The firm added that such a challenge can be made via a full appeal or, more typically, by review – the process introduced in 2010 that lets taxpayers challenge any HMRC decision.

There were initial doubts over the independence of HMRC's review teams, but the new figures indicate that HMRC staff are not shy in finding fault with their colleagues’ decisions.

As to those challenges that ended up at tribunal (the figures cover the review process which is designed to avoid the need for a hearing), HMRC data show taxpayers are also faring better.

Specifically, the number of decisions appealed to an independent tribunal where the taxpayer won has risen, from 13% in 2014/15 to 18% in 2015/16, says Pinsent Masons’ Outlaw.com.

“Many of HMRC's recent successes relate to complex avoidance schemes implemented some years ago,” the firm’s Heather Self told the site. “We are now seeing them challenge straightforward commercial planning, and expect taxpayers to win an increasing proportion of future cases.

 

29th August 2016

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