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Published on 26 August 2022

Disagree with an HMRC decision? Consider asking for a statutory review.

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If you disagree with a decision HMRC have made about your taxes – such as issuing a penalty – you usually have a legal right to ask a different person to review that decision. If you are unhappy with the outcome of that review, you can appeal to a Tribunal to ask a judge to consider your case. We explain more below.

⚠️ The information on this page does not apply to indirect taxes, like VAT.

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What is a statutory review?

A statutory review is a legal right that every taxpayer has after HMRC make a decision which you can appeal.

During a statutory review, an HMRC officer who was not involved in the original decision will reconsider the decision HMRC had made.

It is also known as an internal review, to show that it is carried out within HMRC.

What is a decision?

An HMRC decision simply means that HMRC have formally decided to do something which the law allows them to do. For example, HMRC may issue a penalty for the late submission of a tax return or the late payment of tax.

When HMRC make a decision they will always let you know.

What is an appeal?

An appeal is a formal right of a taxpayer to dispute an HMRC decision. You can appeal most HMRC decisions. If a decision is appealable, HMRC should let you know when they make that decision.

How do I appeal a decision?

If you want to appeal a decision, in the first instance, you should ask the original HMRC officer who made the decision to reconsider. The usual time limit for this is 30 days from the date of the decision.

If you disagree with the outcome of that initial appeal, you can then ask either of the following to reconsider the decision:

  • an independent HMRC officer who was not involved in the original decision (this is called a statutory review); and/or

  • a judge in the First-tier Tribunal.

If you choose a statutory review and do not agree with the outcome, you can then ask a judge in the First-tier Tribunal to reconsider the decision.

We cover the time limits for the above steps in our main guidance.

The possible appeal journeys are therefore:

If a statutory review is available, HMRC may offer it. If not, then you have a right to request it.

If there is no right of appeal against the decision, then you do not have access to these forms of redress. Instead, you can complain to HMRC. In some cases, a judicial review may be possible – but this can be expensive and has strict time limits.

What are the benefits of a statutory review?

A statutory review is undertaken by a review officer within the Solicitor’s Office and Legal Services part of HMRC. Although the review is still carried out within HMRC, the person doing the review is independent from the original decision-maker. They can (and often do) vary or cancel the original decision. Otherwise, they will uphold (agree with) it.

A statutory review is free, unless you engage an agent such as a tax adviser to help you with it – in that case, you will need to pay their fees. HMRC must tell you the outcome of the statutory review within 45 days, unless they agree an extension with you. It therefore forces HMRC to reconsider the decision from scratch and places a legal time limit on them for doing so.

If you do not agree with the outcome of the statutory review, you can still appeal to the Tribunal and ask a judge to consider your case. Appealing to the Tribunal can be costly – especially if you pay for help, such as from a tax adviser or legal professional. It requires a lot of preparation by both you and HMRC.

Asking for a statutory review rather than appealing directly to the Tribunal can save cost, time and effort for both you and HMRC. This is because most people who accept or request a statutory review do not later appeal to the Tribunal.

If a statutory review is in progress, you must wait until it is completed before you can appeal to a Tribunal.

What happens in a statutory review?

We provide detailed guidance on what happens in a statutory review on our Tax appeals page.

When should I ask for a statutory review?

You should consider a statutory review in any case where you have received an appealable decision that you disagree with on legal grounds. Some examples of where a statutory review may be worthwhile include:

  • you think that a decision has not been issued lawfully (for example, HMRC have issued a tax assessment or opened an enquiry but you believe they are too late to do so);
     
  • you disagree with how HMRC have interpreted or applied the law (for example, if HMRC have not allowed you to claim a business expense deduction which you believe the law allows, or you disagree with how HMRC have categorised your behaviour when applying a penalty); or
     
  • you believe you have a reasonable excuse against a penalty which HMRC have issued and the law allows you to appeal against that penalty if you have a reasonable excuse. In this case you would usually first make a straightforward appeal to HMRC explaining why you think you have a reasonable excuse. If HMRC do not agree with you in that appeal, you can ask for a statutory review to ask a different HMRC officer to look at it again.

If you simply disagree with the law, rather than how HMRC have applied it, then a statutory review (or any kind of appeal) is unlikely to be worthwhile. You may instead wish to write to your MP and explain why you think the law is unfair. HMRC have a duty to apply the law and collect the tax and other liabilities which they believe are due, and neither HMRC nor the Tribunal have any power not to apply the law.

For example, if you have received a penalty and:

  • you do not dispute that it has been lawfully issued; and

  • you have no grounds for appeal (such as a reasonable excuse),

then any kind of appeal (including a statutory review) is unlikely to be worthwhile.

In very limited circumstances, HMRC may decide not to collect tax or other liabilities – even if, strictly speaking, the law says they are due. However, this only applies if it would be in line with HMRC’s responsibilities to manage tax collection in an efficient manner. For example, the tax due may be very small and it may not be a good use of HMRC’s time and effort to collect it. This ‘power’ not to collect tax would always be at HMRC’s discretion, so a taxpayer cannot force HMRC to use it.

If you are on a low income and considering an appeal, you can get free and independent advice from the charities TaxAid and Tax Help for Older People. They should be able to help you understand if you have grounds for appeal and they may be able to assist you in making an appeal. See our Getting Help page for more information on how to contact them.

Where can I find more information?

We provide lots of detailed information on tax appeals generally in our guidance pages.

You can also read general information about disagreeing with a tax decision, including statutory reviews, on GOV.UK.

If you have any experience with statutory reviews which you would like to share with us, then please get in touch.

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