Income tax assessment and appeals - L3 Flashcards
Lecture 3 (25 cards)
What does the Taxes Management Act 1970 require from taxpayers?
A return disclosing financial details, possibly including a self-assessment of income tax.
What happens if HMRC disagrees with a self-assessment or there isn’t one?
HMRC issues its own assessment.
What system will replace the current assessment process?
Digital Tax Accounts.
What did the 2009-10 reform do to the tax appeals system?
Replaced the old system with a new unified tribunal system under TCEA 2007.
What did the Constitutional Reform Act 2005 establish?
The Supreme Court, replacing the House of Lords as the final appeal court.
Where can income tax appeals be made?
To a First-tier Tribunal under ss. 31 and 31A TMA 1970.
What options does a taxpayer have under ss. 49A–49I TMA 1970?
Internal review by HMRC or direct appeal to tribunal.
What is the function of the Upper Tribunal?
Hears appeals from the First-tier Tribunal and hears Complex cases if designated.
Can tax be postponed during an appeal?
Yes, if the taxpayer requests and shows reasonable grounds for overcharge (s. 55 TMA 1970).
Who carries the burden of proof in income tax appeals?
The taxpayer (s. 50 TMA 1970; Haythornwaite & Sons v Kelly).
What is the nature of tribunal hearings?
Adversarial, not inquisitorial (Wicker v Fraser [1982]).
Can a party have a representative at a tribunal?
Yes, even if not legally qualified (r. 11 Tribunal rules).
Are tribunal hearings public?
Yes, with privacy allowed only in “truly exceptional” cases (R&C Comrs v Banerjee [2009]).
Do tribunals have power to increase assessments?
Yes, under s. 50 TMA 1970.
Can tribunals award legal costs?
Generally no; except for Complex cases or unreasonable behaviour (r. 10 Tribunal rules).
Does the Upper Tribunal have power to award costs?
Yes, under r. 10 Upper Tribunal rules.
How can one appeal a tribunal decision?
On a point of law only: First-tier → Upper Tribunal (s. 11 TCEA 2007); then → Court of Appeal (s. 13); then → Supreme Court (s. 40 CRA 2005).
What happens to tax payment during further appeals?
It must be paid or refunded as per the most recent decision (s. 56 TMA 1970).
What case defines what constitutes a point of law?
Edwards v Bairstow [1956]: only an error of law if incorrect legal reasoning or an unreasonable conclusion.
Why are tribunal decisions hard to appeal?
Because many borderline cases involve statutory terms with no single precise meaning.
What is the issue with distinguishing law and fact in appeals?
It is often blurred; statutory interpretation can involve both (Endicott).
What reform does Avery Jones propose?
Fewer appeal levels and automatic cost awards for successful taxpayers.
What does Tiley suggest to improve appeal courts’ decisions?
Using specialist law clerks for non-tax specialist judges.
What does Chan argue for in relation to HMRC rulings?
Binding pre-transaction rulings with a fast-track appeal process.
