What to Do If You Disagree with a Tax Decision: Your Options Explained

Posted: 14th January 2025

Receiving a tax decision you disagree with from HMRC can bring a wealth of frustration and stress. So it’s important for you to know your rights and understand the options available to you if you want to take steps to challenge a decision.

In this handy guide, we’ll take you through these options in more detail, with a focus on informal resolution, formal appeals, and seeking professional guidance.

Check the Details of the Tax Decision

Before you rush into challenging HMRC, take some time to review the decision carefully. It’s vital that you understand the details of HMRC’s decision, including the reasoning behind it and any supporting evidence. The more information you have, the more prepared you’ll be to challenge a decision.

We recommend reviewing the decision letter and checking key details including dates, amounts, and HMRC’s reasons. You should also assess whether any mistakes have been made by HMRC.

If anything is unclear to you, be sure to seek clarification from HMRC, as this may lead to a quicker resolution without the need for a formal appeal. Caseworkers may be able to give you more details on the decision and why it was made.

Tax advisers or accountants can help you review HMRC’s decisions and identify potential errors or misinterpretations, so be sure to seek advice if you need it. They will be able to deal with HMRC on your behalf to immediately remove the stress from the process.

If this doesn’t lead to the conclusion you’re looking for, you can then begin to take steps to challenge HMRC’s decision.

Informal Resolution vs. Formal Appeal

Depending on your circumstances, you may choose to pursue an informal resolution or make a formal appeal.

An informal resolution involves contacting HMRC directly to discuss the issue. If HMRC doesn’t change its decision and case workers cannot reach an agreement with you, you can request a review. This process is much faster, less stressful and less formal than appeals to tax tribunals.

When approaching HMRC, make sure you’re polite, clear, and well-prepared. HMRC will be less likely to come to an agreement with taxpayers who fail to follow the correct procedures.

Formal appeals work differently. Instead of working alongside HMRC to reach an agreement, you will state that you disagree with the decision HMRC has made in writing. You’ll have 30 days from the date of the decision to submit your appeal.

When this has been submitted, the case worker who made the decision will consider your appeal. They will write to you to let you know the outcome.

If your appeal isn’t resolved formally, a tribunal may be necessary. Be sure to reach out to us before you escalate your dispute, as we can support you with both informal and formal processes to help you reach the right outcome.

What Happens If Your Dispute Escalates?

Some taxpayers choose to take their cases to a tax tribunal if they cannot resolve their dispute informally or through the appeals process. Tax tribunals are independent of the government and have their own procedures, which makes them different from both informal discussions and formal appeals.

If you decide on a tax tribunal, you will be expected to attend a hearing to state your case along with your representative and HMRC. The tribunal will listen to both sides of the argument before coming to a decision.

This process comes with its own pros and cons. If all goes well, you will reach an agreement with HMRC, or negotiate a middle ground. But tribunals cost both time and money, so they won’t be a suitable course of action for everyone.

Seeking the advice and support of a specialist like NHD Tax can increase the chances of a favourable outcome – especially during a tribunal. You can book a confidential call with us here.

Making the right choice

We understand how difficult it can be to reach the outcome you want with HMRC. So if things haven’t gone to plan, be sure to assess the decision HMRC has made in detail, and think carefully whether an informal resolution, formal appeal or tax tribunal is the right choice for you.

If you’re struggling to choose the right path, get in touch with our team. With years of professional tax experience, we can help you navigate the process with confidence and improve the likelihood of a positive outcome.

Reach out to us for a no-obligation consultation.