The new appeal tribunals come into operation on 1 April 2009.
The new tribunals do not deal only with tax matters – they deal with everything – but they are divided into “chambers” in which similar types of appeal are heard. Tax appeals will be heard by the First Tier chamber, to be known as the Tax Chamber, with effect from 1 April. Appeals against the decisions of the Tax Chamber will be heard in the Upper Tribunal, which will be known as the Finance and Tax Chamber.
Most appeals will be dealt with by the First Tier tribunal – but complex appeals may be transferred to the Upper Tribunal at first instance.
There is also the opportunity for straightforward appeals to be dealt with on paper, without the need for HMRC or the taxpayers to attend a hearing.
The costs position at the First Tier will be similar to the existing rules – that there will be no order for costs unless one party has acted unreasonably. However, costs will be available in the Upper Tribunal – with the possibility of being able to opt out and bear one’s own costs, whatever the result.
There will be a new legal right to an internal review by HMRC of decisions disputed by the taxpayer. These reviews will be optional, and will be undertaken by a trained review officer unconnected with the case and outside the immediate line management chain of the decision maker. Such reviews must be completed within 45 days. This could be an extremely useful way of resolving issues that would otherwise involve the delays and cost of a formal appeal hearing. It has been suggested that it would be best to do this by way of an informal meeting so that the issues and arguments are fully understood. (This sounds a bit like a preliminary hearing in an arbitration, which, in my experience, can be very helpful indeed). However, we shall see.