The appeal itself goes to HMRC, and three routes open from there: ask HMRC for a statutory review, accept a review HMRC offers, or notify the appeal to the First-tier Tribunal. All three follow the first step — a written appeal against the amendment the closure notice makes, given to HMRC within 30 days of that amendment being notified to the company. What happens if my R&D claim is rejected covers that step, including where a claim was removed on procedure. Each statutory deadline that follows is counted from the date on the HMRC document that starts it, so the clock does not wait for the letter to be read. Miss the wrong one and the dispute is over: where HMRC offers a review and the company neither accepts it nor notifies the tribunal inside the 30-day acceptance period, HMRC’s view takes effect as a written settlement, and only a late appeal the tribunal admits will displace it.
What does a statutory review involve?
HMRC looking at its own decision again, through a review officer in a different team not involved in it. It does not use up the right to go to the tribunal.
Two ways in. The company asks for one, and HMRC must write with its view of the matter, normally within 30 days. Or HMRC offers one, and the company has 30 days from the date on the offer letter to accept. Only one review is available per matter, and the option closes once the appeal reaches the tribunal.
How far the review goes is for HMRC to judge. What the review officer cannot ignore is representations made in time to be considered — the one part of a review the company controls. An R&D dispute reads differently when the advance, the uncertainties and the cost workings are set out once, in order, for someone reading them cold.
The conclusion — upheld, varied or cancelled — must be notified within 45 days, running from the day HMRC gave its view where the company asked, or from its receipt of the acceptance where HMRC offered the review. A different period can be agreed. If nothing arrives in time, the review counts as upholding HMRC’s view. Once issued, the conclusions take effect as a settlement in writing. The only way back is to notify the appeal to the tribunal — inside the post-review period, or later if the tribunal gives permission.
How long is there to take the appeal to the tribunal?
Thirty days from the date on the review conclusion letter. Where a review was offered and not accepted, the same 30 days runs from the date of the offer. Outside either 30-day window the appeal can be admitted only with the tribunal’s permission, which the notice must request and justify. That permission also reaches a review offer left to lapse: a late appeal the tribunal admits displaces the settlement the offer would otherwise have made final. And where the 45 days ran out with no conclusion, the window opens the day after — there is nothing to wait for.
The notice identifies the decision, the result the company wants and its grounds, with a copy of HMRC’s decision and reasons so far as the company has or can reasonably obtain them. The tribunal then allocates the case: default paper, basic, standard or complex. Each side normally bears its own costs. The exceptions are narrow: wasted costs, a party acting unreasonably in bringing, defending or conducting the proceedings, and complex cases. Complex allocation carries a costs regime with it, and the only way out is a written request to the tribunal within 28 days of receiving the allocation notice — the one deadline here that runs from when the notice arrives rather than the date on it.
A First-tier Tribunal decision binds the parties to it and sets no precedent: winning settles nothing for anyone else, and losing closes no sector. Such decisions still carry weight with officers and later tribunals, which makes the register of R&D tribunal decisions worth reading before a dispute, not during one. An onward appeal to the Upper Tribunal lies on a point of law, with permission.
Where the enquiry is still open and nothing has been decided, the company can ask the tribunal to direct HMRC to close it; how long an HMRC enquiry takes sets out that application.
Where does alternative dispute resolution fit?
Alongside the appeal, not instead of it. An HMRC mediator works with the company and the officer holding the case, without taking it over. ADR is available where agreement has broken down, during a compliance check that has stalled, and at the end of one that produced an appealable decision, and asking for it gives up no right to appeal or to ask for a review. It is not a statutory process: HMRC decides case by case whether to accept an application, and the conditions below sit in HMRC’s published guidance rather than in legislation, so check the current version before relying on the dates.
For corporation tax the order of events catches companies out. Where HMRC has offered a statutory review, ADR is not open until the appeal has been notified to the tribunal and acknowledged, whether that review was accepted or turned down. It is also closed to cases the tribunal has categorised as paper or basic. HMRC answers an application within 30 days, and acceptance commits the company to replies within 15 working days and a meeting within 90 days.
Does the tax have to be paid while the appeal runs?
Unless payment is postponed, yes. Tax charged by the closure notice amendment is due and payable as if there had been no appeal.
Postponement is a separate application, and a change of circumstances allows a later one. Where the company has grounds for believing the amendment overcharges it, it applies to HMRC in writing within 30 days of the closure notice, stating the amount overcharged and why. If HMRC does not agree the figure, the company has 30 days from the date on HMRC’s decision letter to refer it to the tribunal. What gets postponed is the amount there appear reasonable grounds for believing is overcharged.
Two limits. Postponement does not stop interest, which can be charged on tax in dispute until it is paid. And it reaches only the tax the amendment charges. A payable credit HMRC has not paid is a different question, and can HMRC make me pay back an R&D tax credit? covers both withholding before payment and recovery after it.
What an HMRC R&D enquiry involves sets out the material all of this runs on. Where another firm prepared the claim, HMRC enquiry defence is the standalone engagement that covers it. No adviser can tell you what a tribunal would decide.
Sources
- TMA 1970 s49A — once notice of appeal has been given to HMRC, the appellant may require a review, HMRC may offer one, or the appellant may notify the appeal to the tribunal.
- TMA 1970 s49B — where the appellant requires a review, HMRC must notify its view of the matter within 30 days of receiving the notification, or such longer period as is reasonable; no review where one has already been required or offered, or the appeal notified to the tribunal.
- TMA 1970 s49C — HMRC’s offer of a review, with an acceptance period of 30 days beginning with the date of the offer document; where the offer is not accepted, HMRC’s view is treated as if contained in a written settlement agreement under s54(1) which the appellant may not resile from, except so far as the appeal is notified to the tribunal under s49H.
- TMA 1970 s49E — the nature and extent of the review are as appear appropriate to HMRC, having regard to steps taken before it began; the review must take account of representations made at a stage giving HMRC a reasonable opportunity to consider them; conclusions are upheld, varied or cancelled, notified within 45 days beginning with the relevant day or such other period as may be agreed, failing which the review is treated as upholding HMRC’s view.
- TMA 1970 s49F — the conclusions of a review take effect as a written settlement agreement, unless the appeal is notified to the tribunal under s49G.
- TMA 1970 s49G and s49H — the post-review period of 30 days beginning with the date of the review conclusion document, and the acceptance period where a review was offered but not accepted; outside either, the appeal may be notified only with the tribunal’s permission.
- TMA 1970 s55 — tax charged by an amendment under paragraph 34 of Schedule 18 to the Finance Act 1998 is due and payable as if there had been no appeal; application to postpone by notice in writing within 30 days of the issue of the closure notice, stating the amount believed overcharged and the grounds, with referral to the tribunal within 30 days of the date of the document notifying HMRC’s decision on it, a later application where circumstances change, and postponement of the amount there appear reasonable grounds for believing is overcharged.
- FA 1998 Sch 18 para 34 — notice of appeal against an amendment made by a closure notice must be given in writing, within 30 days after the amendment was notified to the company, to the officer who gave the notice.
- Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, rule 20 — what a notice of appeal must contain, and the requirement that a late notice request permission and give the reason for the delay. The 30-day limit itself sits in TMA 1970, not in the Rules.
- Rule 23 and rule 10 — allocation to default paper, basic, standard or complex categories; costs orders confined to wasted costs, unreasonable conduct in bringing, defending or conducting proceedings, and complex cases where the taxpayer has not asked, within 28 days of receiving notice of the allocation, to be excluded from the costs regime.
- TCEA 2007 s11 — appeal to the Upper Tribunal on a point of law only, exercisable only with permission from the First-tier Tribunal or the Upper Tribunal.
- Use alternative dispute resolution to settle a tax dispute — the mediator’s role; availability during a compliance check where progress has stalled and at the end of one where an appealable decision has been made; ADR does not affect the right to appeal or to ask for a statutory review; for direct tax, where a review was offered, the appeal must be notified to the tribunal and acknowledged before applying; paper and basic cases excluded; a response within 30 days, replies to requests within 15 working days and a meeting within 90 days of acceptance; rejections agreed by a panel of independent tax professionals.
- Disagree with a tax decision or penalty: get a review — the review officer is in a different team and was not involved in the original decision, and reviews usually take 45 days.
- Disagree with a tax decision or penalty: delay payment — 30 days from starting the process to ask to delay payment, and interest chargeable on the tax in dispute until it is paid.
- Appeal to the tax tribunal — the 30-day window from the date on the decision letter, and a judge’s decision on any late appeal.
This page describes the rules as they stood at the review date above, as general information rather than advice on your circumstances. For how that distinction works, see our terms; for an answer on your own facts, talk to us.