Preparing a tax appeal: the short answer
The First-tier Tribunal makes the findings of fact relevant to an appeal, and most appeals turn on them (it is rare for a case to turn simply on a pure point of law). Preparation means precise grounds of appeal, contemporaneous documents and honest witness evidence, delivered to the tribunal’s timetable. The time limit for appealing an HMRC decision is usually 30 days, so the work starts as soon as an adverse decision is received.
Begin with a strategic review
Evaluate your appeal as soon as possible. Check every factual statement and computation in HMRC’s letter against the primary documents. Decide which facts you must prove, provisionally identify all relevant documents to be relied on, and whether you need witness evidence. Estimate the cost. An internal HMRC review, which takes around 45 days, may narrow the issues, though it rarely helps where a point of principle is at stake.
Starting the appeal
For direct taxes, you appeal to HMRC and then notify the tribunal. For VAT, the notice of appeal goes straight to the tribunal. Rule 20 of the tribunal rules requires the notice of appeal to identify key matters, including the decision, the grounds of appeal and the result sought. Simply stating that HMRC’s decision is “wrong as a matter of fact and/or law” will not be sufficient. The Grounds of Appeal need to identify and particularise as a matter of fact and/or law why HMRC’s decision is wrong. Number each ground of appeal and ensure it is properly arguable. Amending later needs permission from the Tribunal, and a new ground must have real prospects of success (Gakhal v HMRC [2016] UKFTT 356).
After filing – HMRC’s Statement of Case
The Tribunal allocates the case to one of four categories: default paper, basic, standard or complex. The basis of case allocation is identified in the Tribunal’s Practice Statement: https://www.judiciary.uk/guidance-and-resources/practice-direction-for-the-first-tier-tribunal-tax-chamber-allocation-of-cases-to-categories-in-the-tax-chamber/. In standard and complex cases, HMRC provides a statement of case within 60 days; the purposes of which is to set out their position on the law and facts. Review the Statement of Case closely. Mark the agreed facts, the disputed facts and how you will prove yours. If it does not properly set out HMRC’s case, then you may need to ask for further particulars.
Directions then cover disclosure of documents to be relied on by each party, followed by exchange of witness statements, listing for a substantive hearing, preparation of e-bundles and skeleton arguments. Treat each date in the directions timetable as fixed. An application to amend the directions timetable should only be made after contacting the other party for their consent, and in any event in compliance with the Tribunal’s Practice Statement: https://www.judiciary.uk/guidance-and-resources/applications-for-extension-of-time-practice-statement-for-first-tier-tribunal-tax-chamber/
Evidence
Documents created at the time carry considerable weight. The tribunal is likely to be sceptical of a witness who claims detailed recall of distant events, but a witness may properly give evidence from a recent reading of the files to refresh their memory. Expert evidence, if permitted by the Tribunal, can help on issues relating to matters such as accounting, foreign law.
Privacy
Hearings are generally public. In Clunes v HMRC [2017] UKFTT 0204 (TC), a well-known actor was held to have no special right to privacy. In HMRC v The Taxpayer [2024] UKUT 364 (TCC), the Upper Tribunal set aside a direction for a private hearing because no clear and cogent evidence justified departing from open justice. Raise any privacy concern at the outset with your advisers.
Frequently asked questions
Will my tax appeal be heard in public?
Generally yes. The tribunal can direct that all or part of a hearing be held in private, but it balances privacy against the principle of open justice. An application needs clear and cogent evidence, so raise any concern early.
Should I ask HMRC for a review before appealing?
Sometimes. A review takes around 45 days, it may narrow the areas of disagreement and can clarify HMRC’s arguments, which helps if the case goes on to the Tribunal. Where the dispute turns on a point of legal principle or HMRC policy, a review is unlikely to change the outcome. You cannot appeal to the Tribunal until the review is complete.
Do I need witnesses?
If facts are disputed, usually yes. A witness statement tells what happened in the witness’s own words, stands as their evidence and must contain a statement of truth. The witness must be available to be cross examined. Documents created at the time of events being considered will generally carry more weight than recollection years later.
Can I represent myself at the tax tribunal?
You can, but a contested appeal involves disputed facts, witnesses, cross examination and legal argument, and the tribunal enforces its directions strictly. If you have no experience of presenting a case, take advice early, at least on the grounds of appeal and the evidence.