HMRC has been accused of adopting an aggressive approach towards taxpayers amidst an increase in the number of Judicial Reviews at the High Court involving the organisation.
In recent years, the number of these reviews has risen dramatically. In 2014, there were 43; 76 in 2015; and 90 in 2016. This number increased by more than a third in 2017, however, to a total of 122.
What Has Prompted the Increase?
The increase comes as HMRC faces pressure from the Government to increase tax revenues quickly, to narrow its £33 billion tax shortfall, though in Q1 the taxman collected a total of £142 billion, a £5.2 billion increase year-on-year. This has led to it pursuing taxpayers more aggressively, and often unfairly. The organisation has therefore become more vulnerable to legal proceedings by disgruntled taxpayers. In recent cases, HMRC has been accused of ignoring its own guidance on the National Minimum Wage, retrospectively altering the treatment of Custom Duty, and issuing information request notices to taxpayers who were not within its jurisdiction.
It has been claimed that the increase demonstrates that HMRC has begun to overstep the boundaries of acceptable behaviour. Many of the Judicial Reviews come as a result of simple, avoidable mistakes, which HMRC refuses to rectify. However, when action has been taken against the organisation, it has often withdrawn its initial decision. It is unfortunate that some taxpayers have had to go to such lengths to force HMRC to resolve issues.
The increase also shows that taxpayers are becoming more wary of the taxman, and more willing to challenge it in the High Court. It is unknown what the total level of redress was for those who brought a case against HMRC in 2017.
How to Challenge a Tax Bill
Taxpayers may wish to challenge a tax bill if they believe calculation of the bill was done incorrectly, or if they wish to negotiate a deal to pay off tax debts. One of the most common issues for businesses last year was VAT penalties. Thankfully, after review, 66 percent of these penalties were scrapped by HMRC. To solve taxation issues, taxpayers with a complaint are first advised to contact the organisation for an informal resolution. If the taxpayer is not satisfied with this, they can request an Alternative Dispute Resolution Procedure. For the best chances of success, taxpayers, both individual and as a representative of a business, should work with a tax advisor such as MCC Accountants, who can provide advice.
If the process is unsuccessful, the Adjudicator’s Office can provide a free examination of the complaint. If the taxpayer is still unsatisfied, the issue can be raised with a local MP, who will refer it to the Parliamentary and Health Service Ombudsman. Only in the most serious of cases can the complaint be raised via a Judicial Review in the High Court. The process can be exceptionally costly. We would advise businesses to contact MCC Accountants, a leading tax consultant in Salford, before proceeding.
Overall, 52% of reviews were successful last year. This figure involves all 29,500 reviews requested, and is not just limited to those which reached the High Court.
Are You Looking for a Tax Consultant in Salford?
If you’d like advice on any tax issues or problems your business has experienced relating to HMRC, MCC Accountants, a leading tax consultant in Salford, are happy to provide you with assistance. Call us on 0161 707 1500, email [email protected], or complete our contact form here.