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Corporate Services Blog

Lawyers Opposed to charges on HMRC Challenges

27/04/2016

The UK Government has put forward proposals to introduce fees for individuals challenging decisions to the tax tribunal.  This has brought about strong opposition from trade bodies who represent lawyers and accountants across England and Wales.
The law society has warned that this attempt by the government to claw back some of the costs of the judicial system threatens access to independent rulings and also favours the tax authority with any disputes arising.  Other organisations have cried out that this decision could threaten the function of tribunals enabling HMRC to act as both judge and jury creating fear that justice could be denied.
These tribunals provide a vital function in establishing whether the taxpayer has reason to challenge rulings by the HMRC and often find in the individuals favour, whereas in 2014 17.4% of decisions by HMRC were over turned by the First Tier Tribunal.  The Ministry of Justice, which is consulting on the proposals have suggested the following fees; 

First Tier Tribunal;
 Referral Fees  £50 - £200
 Hearing Fees   £200 - £1,000
(depending on the complexity)

Upper Tribunal;
 Referral Fee  £100
 Hearing Fees up to  £2,000

The concern is that if introduced these fees would make it impossible for someone of limited to modest means to challenge unfair decisions despite having a strong case and that in the case of disputes over a smaller amounts of money may not seem worth pursuing when weighed against these additional costs.

It has also been highlighted that there has been no suggestion that the HMRC would pay any equivalent court fee and in order to deter wrongful decisions the HMRC should be just as accountable as the taxpayer on costs. 

It is not clear as of yet what effect these outcries against the penalisation of our statutory rights on what some experts are terming a ‘penalty on justice’ have had on the governments’ proposals.
 



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