Any taxpayer who disputes a ruling from HMRC can appeal the decision to a tribunal. The tribunal system is independent of HMRC and both HMRC and the taxpayer have argued and won cases at the tribunal.
The government are now proposing to impose a charge of up to £2,000 for contesting a decision. This is outrageous. The implication is that HMRC will challenge everything and it will not be worth contesting for taxpayers because the costs are too high.
This is the same government that are charging court fees in other areas of the law and thereby winning the arguments not on their merits but by default as taxpayers do not have bottomless pockets but HMRC (and other government departments, funded by the taxpayer) do!
According to statistics quoted in the Independent – 17.4% of decisions made by HMRC were overturned at the First Tier Tribunal.
The Law Society has said that it believes, “higher (court) fees may deter individuals from bringing legitimate challenges”.
The Chartered Institute of Taxation has said, “These proposals are counter-productive and wrong in principle….the effect will be to deter some potential applicants, including many of modest means, and prevent them seeking access to justice when they have a perfectly good case.”
Clearways Accountants are looking to find a suitable tax fees insurer so that clients can pay a modest fee and cover the costs of taking a case to review or tribunal.