The overhaul of tribunal cases has been welcomed by advisers, who say it will standardise procedure across taxes.

Currently, any discrepancies over direct taxes are dealt with by a tribunal. Under the plans, HMRC will give powers of review to a separate internal department prior to a court appearance.

Following a consultation, there was overwhelming support for the introduction of a review process, which will be both statutory and optional, meaning taxpayers will have a statutory right to review, but can opt out of one.

The changes, to commence in April 2009, apply mainly to direct taxes, as VAT disputes were already dealt with via review.

Jason Collins, tax litigation partner at McGrigors, said HMRC wants to ‘streamline’ the department.

The restructured processes mean all reviews will be dealt with and a decision given within 45 days of cases being filed, subject to the time limit being agreed. Previously, there was no time limit as to when a decision was given.

Taxpayers will have 30 days to accept an offer of review and a further 30 days to take a dispute to tribunal following the decision of HMRC.

Collins added that although ‘most reviews are upheld, they do turn some around. That is great news for taxpayers and should help flush out inspectors making wrong decisions’.