The backlog of tax disputes waiting to be heard by the First-tier Tribunal rose to 28,800 in 2017/18, up from 25,520 in the previous year.
According to Pinsent Masons, this is a reflection of HMRC’s aggressive approach under its litigation and settlement strategy and an increased number of challenges by taxpayers to the imposition of accelerated payment notices (APNs).
Steven Porter, partner at Pinsent Masons, commented: ‘The litigation framework HMRC has to keep to forces it to take an unrelenting approach; it will often give no ground and frequently will want to win every point. Recent updates to the framework may not have gone far enough in enabling HMRC to settle with taxpayers’. There is also currently a backlog of 154 cases in the upper tribunal.
Pinsent Masons says the backlog has now increased for three years in a row and has more than doubled from 13,460 in 2009/10.
The number of judicial reviews faced by HMRC increased by 36% last year to 122, up from 90 in 2016. Many of these judicial reviews involve taxpayers appealing against the imposition of APNs, which require a taxpayer to pay the full amount of disputed tax up front before a court or tribunal rules on the dispute. The tribunal does not have jurisdiction to consider whether HMRC was correct to issue the APN but can consider the penalties issued for non-payment of an APN.
HMRC has withdrawn over 6,000 APNs since the power was introduced in 2014, which may indicate that it has been ‘overly aggressive’ in imposing these penalties, Porter said.
The backlog of tax disputes waiting to be heard by the First-tier Tribunal rose to 28,800 in 2017/18, up from 25,520 in the previous year.
According to Pinsent Masons, this is a reflection of HMRC’s aggressive approach under its litigation and settlement strategy and an increased number of challenges by taxpayers to the imposition of accelerated payment notices (APNs).
Steven Porter, partner at Pinsent Masons, commented: ‘The litigation framework HMRC has to keep to forces it to take an unrelenting approach; it will often give no ground and frequently will want to win every point. Recent updates to the framework may not have gone far enough in enabling HMRC to settle with taxpayers’. There is also currently a backlog of 154 cases in the upper tribunal.
Pinsent Masons says the backlog has now increased for three years in a row and has more than doubled from 13,460 in 2009/10.
The number of judicial reviews faced by HMRC increased by 36% last year to 122, up from 90 in 2016. Many of these judicial reviews involve taxpayers appealing against the imposition of APNs, which require a taxpayer to pay the full amount of disputed tax up front before a court or tribunal rules on the dispute. The tribunal does not have jurisdiction to consider whether HMRC was correct to issue the APN but can consider the penalties issued for non-payment of an APN.
HMRC has withdrawn over 6,000 APNs since the power was introduced in 2014, which may indicate that it has been ‘overly aggressive’ in imposing these penalties, Porter said.
