For direct tax cases, you must first appeal HMRC’s decision by sending a written notice to HMRC within 30 days from the date of the decision letter. In the notice, you must specify the grounds of appeal.

Although you have appealed the decision, the tax remains due and payable. If you do not wish to pay the tax while the matter is in dispute, it is very important that you remember to include an application for postponement of the tax in your notice. This will usually be accepted by HMRC, but if they refuse, you can refer the application to the First-tier Tribunal (the FTT) within 30 days from the date of HMRC’s decision on postponement.

Once you have appealed the decision to HMRC, you have three options:

1. you can immediately notify your appeal to the FTT;
2. you can wait for HMRC to offer you a review of their decision (to be undertaken by an independent HMRC Officer); or
3. you can require HMRC to review their decision (to be undertaken by an independent HMRC Officer).

If you want matters to move quickly, then the first option may be the way to go. However, having an independent review gives you the best chance of resolving the matter without needing to involve the FTT. Ignoring automated penalties and default surcharges, around 30% of HMRC decisions are cancelled or varied, but in practice this is much more likely where there is a small amount of tax at stake and there are no issues of wider interest involved.

When HMRC offer a review (option 2), they will provide you with their “view of the matter” and you will have 30 days from the date of the letter to accept the offer of a review or notify your appeal to the FTT. If you do nothing, the view of the matter will be treated as a settlement that has been agreed.

If you require a review (option 3), HMRC will provide you with their “view of the matter” (usually within 30 days), and the review should be carried out within 45 days of the “view of the matter” letter. However, HMRC may ask you to agree to extend the time period for the review. 

Once you have received notice of the conclusion of HMRC’s review (under options 2 or 3), you can accept the conclusion, or you can notify your appeal to the FTT within 30 days of the date of the letter. 

For cases relating to indirect tax, HMRC’s decision letter will offer you an internal review of their decision (which will be undertaken by an independent HMRC Officer). 
You have 30 days from the date of the decision letter to either:

• accept HMRC’s offer of an internal review; or 
• appeal to the FTT.

Once you have received notice of the conclusion of HMRC’s review, as with direct tax matters, you can accept the conclusion, or you can notify your appeal to the FTT within 30 days of the date of the letter. 

If you accept the offer of an internal review, HMRC will not collect the disputed tax until the end of the review. However, if you choose to appeal to the FTT, the disputed tax remains due and payable to HMRC unless you can satisfy them it would cause you hardship to pay the tax, or you make a successful “Hardship Application” to the FTT. 

The key differences in the two processes are, therefore:

• unless you can show hardship, the payment of indirect taxes cannot be postponed; and
• indirect tax decisions do not have to be appealed to HMRC before they are appealed to the Tribunal.

There are a lot of different deadlines within the appeal process, and you need to be very careful to take action within the time allowed. The fact that most time frames run from the date of the letter is something to watch out for as, if a letter is posted to you, some of the time will already have expired. 

In direct tax cases you must always have notified an appeal to HMRC before you can notify it to the FTT. If you are out of time to notify an appeal to HMRC, you can ask HMRC in writing to accept a late appeal. If they do not agree, you can ask the FTT for permission to make a late appeal to HMRC. Similarly, if you miss the deadline for notifying an appeal to the FTT, you can ask the FTT for permission to notify your appeal late.

With an indirect tax case, you can appeal directly to the FTT, but if you want to seek a review after the time for accepting one has expired, you will have to make a request in writing to HMRC. If HMRC refuse, then your only option will be to ask the FTT for permission to make a late appeal.  

In all situations where you are seeking to notify an appeal or make a request out of time, you will need to have a reasonable excuse for the delay, and the longer the delay, the more difficult it becomes.