How to Make a VAT Appeal to HMRC
Updated: Mar 4
A VAT Appeal to Her Majesty's Revenue and Customs (HMRC) in the UK is a formal request for a review of a VAT bill or decision that a person or business believes is incorrect. This process is used when an individual or company believes they have been wrongly charged VAT, or that the amount of VAT charged is incorrect. The appeal process allows the individual or company to dispute the VAT bill and provide evidence to support their case. If the appeal is successful, the VAT bill may be revised or cancelled.
Making a Value Added Tax (VAT) appeal to Her Majesty's Revenue and Customs (HMRC) can be a complicated process, but it is important to understand the process if you believe you have been wrongly charged VAT or HMRC made a decision regarding your VAT which is not justifiable.
If you are unhappy with the HMRC ruling on indirect taxes, like VAT, you can lodge an appeal against the ruling and the rules are very similar for most of the tax rulings. You can get updated and basic information from government site on what to do if you disagree with a tax ruling.
Another option you may have if you disagree with a decision made by HMRC is Alternative Dispute Resolution. This can be used as part of the complaints procedure. If you disagree with HMRC's decision and have the right to appeal, you can appeal to HMRC in writing. You must appeal, usually within 30 days of being notified of the decision by HMRC.
HMRC will consider your appeal. They will agree with you and change their decision or support your original decision. They will confirm your position in writing. You have 30 days from the date of this letter to appeal again if you still disagree with HMRC.
What Should Be Considered Before Making a "VAT Appeal" To HMRC
Before making a VAT Appeal to HMRC in the UK, there are several important factors to consider:
Time Limit: You must make your appeal within 30 days of receiving the VAT bill or decision letter from HMRC. If you miss this deadline, you may not be able to make an appeal.
Evidence: You should gather all relevant evidence that supports your case, such as invoices, receipts, contracts, and any other relevant documents.
Preparation: You should carefully prepare your case and make sure that you have all the necessary evidence to support your appeal.
Professional Help: Consider hiring a VAT specialist who can help you prepare your appeal and provide guidance on the process.
Grounds for Appeal: Make sure you have a valid reason for making an appeal, such as an incorrect VAT charge or a mistake in the calculation of VAT.
Understanding the Process: You should have a good understanding of the appeal process, including what evidence you need to provide and how the appeal will be reviewed.
By considering these factors before making a VAT appeal to HMRC in the UK, you can increase your chances of success and ensure that your appeal is properly prepared and submitted.
Notice of Appeal to HMRC
If you disagree with HMRC’s decision about your VAT, then you ought to first send notice HMRC, making an appeal against the original decision. If HMRC again makes a tax decision in opposition to your opinion, you should contact HMRC again in this regard or get an expert recommendation from a tax accountant.
The first step of a taxpayer wishing to dispute a decision of HMRC should be to have a look at the letter sent by HMRC, which should explain the procedure for making an appeal. An appeal Notice has to be made in writing by the taxpayer (or their legal representative) to HMRC with a copy of the HMRC’s penalty letter. You must appeal within 30 days of the HMRC’s original notice and should professional guidance from a tax consultant to make the appeal.
HMRC Internal Review
An HMRC internal review for a VAT Appeal in the UK is the first step in the appeals process. It is an opportunity for the taxpayer to have their VAT bill or decision reviewed by HMRC's internal team. The internal review is an informal process and is an opportunity for the taxpayer to provide evidence and explanations to support their case. If the internal review is unsuccessful, the taxpayer can then make a formal appeal to the VAT and Duties Tribunal.
The internal review is an important step in the appeals process as it gives the taxpayer the opportunity to resolve the issue without going to the Tribunal. It's also a way for HMRC to consider the taxpayer's case and resolve it at an early stage, without the need for a more formal and lengthy appeal process.
Using an internal review process has many benefits. The internal review process takes place within strict time limits, allowing taxpayers to control the timing of the case and reach a faster resolution than the tax court option. HMRC's internal audit process is subject to a stringent set of procedures and deadlines and it is important to obtain legal help as early as possible.
If the taxpayer does not accept the review or notify the Tax Appeal Tribunal, the tax dispute will be resolved under section 54 TMA 1970 in accordance with HMRC's opinion on the matter. It is therefore important to obtain timely legal advice to guide the internal review process.
If the tax matter is still contentious after the completion of the internal review process, it may also be appealed to the tax court of first instance (section 49D, TMA 1970) or by considering alternative dispute resolution (ADR).
Making an Appeal to the Tax Tribunal
Taxpayers can appeal to the tax court to appeal against a decision made by HMRC. If an appeal to HMRC is unsuccessful after a penalty notice has been issued and HMRC's internal review process is unsatisfactory, an appeal may be lodged with the First Revenue Court (Section 49D, TMA 1970). It is not possible to appeal to the tax court.
The Finance Court is fully independent of HMRC and its main aim is to deal with cases fairly. The court will consider the testimony of both parties equally, while the judge will rely heavily on previous case law.
The initiation of a proceeding before the tax court of the first tier is subject to legal requirements. You are advised to seek legal advice when involved in an HMRC dispute to avoid a situation where a potential claim is time-barred.
The First Tier Tax Tribunal will then establish a title which places the case in one of four classes, each with a different procedure:
Paper Cases: This is usually a simple matter where the facts are straightforward and there is little controversy about the law.
Basic Case: This usually includes standard tax penalties, covers direct and indirect taxes, and includes VAT "immigration claims" and any "reasonable apology claims". These cases are usually resolved at trial.
Standard Case: A case that can be decided in one day, in a simple area of law, with a witness presenting undisputed evidence, is considered the standard path.
Complex Cases: A case is awarded here if it meets any of the conditions in Rule 23(4), FTR 2009.
The First Tier Tax Tribunal is a fact-finding court, so the optimal facts must first be created and this usually requires the most careful preparation. We are experts in the procedures for hearing them and taking our client's cases to the tax court.
Step-By-Step Guide on How to Make a VAT appeal to HMRC
Gather evidence: Before making an appeal, you should gather all the relevant information and evidence that supports your case. This includes invoices, receipts, contracts, and any other documents that can help prove that you have been wrongly charged VAT.
Check the Time Limit: You must make your appeal within 30 days of receiving the VAT bill or decision letter from HMRC. If you miss this deadline, you may not be able to make an appeal.
Contact HMRC: You can contact HMRC by phone or by writing to them. If you prefer to write, you can use the HMRC's online complaint form or send a letter to the relevant VAT office. In your letter, you should explain the reasons for your appeal and provide a detailed description of the evidence you have to support your case.
Prepare Your Case: Before making your formal appeal, you should carefully prepare your case and make sure that you have all the necessary evidence. You should also consider hiring a VAT specialist who can help you prepare your appeal and provide guidance on the process.
Make the Formal Appeal: You can make your formal appeal either in writing or in person. If you choose to write, you can use the VAT Appeal Form (VAT652). If you prefer to appeal in person, you can arrange a meeting with a VAT officer. In your appeal, you should explain why you believe you have been wrongly charged VAT and provide a detailed description of the evidence you have to support your case.
Wait for a Decision: After you have made your appeal, HMRC will consider your case and make a decision. This process can take several weeks or even months. You will receive a decision letter from HMRC that will inform you of the outcome of your appeal.
Further Action: If you are unhappy with the decision, you can make a further appeal to the VAT and Duties Tribunal. This is a specialist tribunal that deals with VAT disputes. You should make this appeal within 30 days of receiving the decision letter from HMRC.
How Long Does HMRC Appeal Take in the UK?
The length of time it takes for an appeal to be processed by HMRC (Her Majesty's Revenue and Customs) in the UK can vary depending on a number of factors, such as the complexity of the case and the workload of HMRC at the time of the appeal. However, HMRC aims to process appeals as quickly as possible.
Generally, an appeal can take anywhere from a few weeks to several months to be resolved. According to HMRC's guidance, the time it takes to process an appeal can depend on whether it is an informal appeal or a formal appeal.
Formal and Informal Appeals
An informal appeal is a request for reconsideration of a decision made by HMRC, which can often be resolved quickly through discussion and negotiation. Informal appeals are usually resolved within a few weeks.
A formal appeal involves submitting a written appeal to HMRC, which may require a more detailed review of the case. Formal appeals can take longer to resolve and may involve a tribunal hearing. HMRC aims to resolve formal appeals within 45 days, but more complex cases may take longer.
It is important to note that these are general timeframes and each case is unique. It is recommended to seek professional advice and guidance from a qualified tax professional to help with the appeals process.
Where Do I Send My HMRC VAT Appeal Letter in the UK?
If you wish to appeal a decision made by HMRC regarding VAT (Value Added Tax), you should send your appeal letter to the address provided on the decision letter or assessment. This will be the address of the VAT office that made the decision, and it will be specific to your case.
If you are unsure which address to use, you can check the HMRC website or contact the VAT Helpline for guidance. The VAT Helpline can be reached on 0300 200 3700 (Monday to Friday, 8am to 6pm).
Making a VAT appeal to HMRC can be a complex process, but it is important to understand the process if you believe you have been wrongly charged VAT. By following the steps outlined in this guide, you can make a successful VAT appeal and get the relief you deserve. However, it's always recommended to seek professional help from a VAT specialist to increase your chances of success.