We are all finding our feet with the new tribunal system, and one of the new aspects is the opportunity for the taxpayer to ask HMRC to conduct an independent review of the relevant decision before appealing to the tribunal. The guidance notes provided by HMRC explain that the review will be undertaken independently and by somebody outside the line management of the persons making the determination. The person conducting the review has 45 days to complete the review, during which time the taxpayer’s right of appeal goes into suspension. After 45 days (unless an extension is agreed upon), the taxpayer’s right of appeal to the tribunal is revived.
Having now become involved in such reviews, I find it apparent to me that they are of only limited benefit. In fact, they seem to be of no benefit at all in any technical dispute. I recently asked for an independent review of a determination on a technical point. If the head of the relevant HMRC office makes a determination, it is difficult to understand how anybody in the same office can sensibly review that decision. Such a person is, by definition, likely to be less senior and less expert on the subject, and who on earth is going to do anything other than conclude that the boss was right? And so it proved. The reviewer of the determination for which I requested review was from the same office as the HMRC office head who made the decision, and that reviewer freely acknowledged that his “technical expertise was not as proficient as the officers responsible for issuing the determination”. Oh, great.
However, the reviewer was able to confirm that the correct procedures were undertaken; action was taken to establish and verify the facts, and appropriate advice was taken and suitable legislation considered. A great comfort – but was that ever in doubt? How about considering whether the decision in dispute is likely to be right or wrong? This is a review prior to the case going to the tribunal, so one might have thought that the review would cover the technical issue that was going to be adjudicated. No, sorry. That seems to be outside the scope of the review.
When the idea of a review was first suggested, many people were cynical, but I really thought there was a great opportunity here to provide a mechanism to resolve issues that would otherwise involve the delays and costs of a formal appeal hearing. It could even include an informal meeting, so that the issues and arguments could be fully understood before the precise issues are put to the tribunal. It is greatly to be regretted that this is not the case.