VAT Penalties Blog


Is it worth appealing VAT decisions?

HMRC’s internal review process upholds many more decisions than previously.

HMRC’s internal review process is now resulting in more internal review requests going against the tax payer than succeeding. Only 48% of taxpayer’s appeals were successful last year, a big drop from the 60% that were successful in 2011.

The internal review process reconsiders decisions inflicted on taxpayers in respect of VAT disputes and the late filing or payment of VAT returns. It is intended to reduce the number of disputes that need to be resolved at the Tax tribunals

Many VAT specialists have noticed that during the last year, HMRC have been less willing to engage in a meaningful and objective dialogue in respect of a disputed decision.

There is a feeling that pressure from the Government to increase tax revenue, combined with cutbacks in staff may be resulting in the review teams rushing their reviews, leaving more of HMRC’s original VAT decisions unchallenged.

12,092 appeals against VAT decisions were upheld by HMRC’s internal review teams last year, out of a total of 25,456 appeals reviewed.

It is still worthwhile however, for a business to seek a review of a VAT decision that they don’t agree with. There is a tendency to assume HMRC’s decisions are correct. However, as the above figure shows, there remains a significant chance that a request for review of a VAT decision would be result in a successful outcome.

For help and advice on all aspects of VAT including assessments, tribunals and appeals contact our team of VAT experts on 08458 502360 or online

VAT-Penalties Team


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