Appeals shoot up 14% after HMRC powers beef-up
UHY Hacker Young study shows significant increase in the number of the people challenging HMRC's calculations of tax owed and penalties handed down
Tougher tax collecting tactics and penalties imposed by HMRevenue &
Customs have contributed to a 14% increase in appeals to tax tribunals,
according to UHY Hacker Young.
Challenges from people claiming to be overtaxed or unfairly punished rose
from 4,311 in 2007 to 4,897 during 2008, the last year figures are available
before the VAT and Duties Tribunal and the Special Commissioners Tribunal became
part of the Unified Tax Chamber.
UHY Hacker Young said HMRC’s current
litigation and
settlement strategy “under which it pledges to fight a case through the
courts rather than negotiate a settlement if it believes it has a strong enough
case, has also helped drive up the number of disputes heard by the tax
tribunals.”
Roy Maugham, tax Partner at UHY Hacker Young, said: “HMRC’s increasingly
aggressive approach to tax collection and litigation has resulted in the soaring
number of appeals to tax tribunals over the last few years.
“HMRC seems to be less and less deterred by the cost of litigation. It is now
much more prepared to go all the way through the tribunals rather than negotiate
a fair settlement with the taxpayer as it used to. It is doubtful whether this
is the most effective and pragmatic way to solve problems.”
HMRC said: “The increase in appeals is largely linked to a handful of VAT
cases.
“The appeals process is there to help HMRC and taxpayers clarify points of
tax law. Our updated powers and litigation and settlement strategy ensures that
when the principle being contested is clear and well understood the tax rules
are properly enforced.”
Further reading:
The
lowdown from UHY Hacker Young
