How to appeal an HMRC decision

A closure notice, an assessment or a penalty notice reads as though the matter has been decided. It is HMRC’s decision, and for most decisions the law gives a right of appeal. Behind that right sits a set route: an internal review, mediation through HMRC’s alternative dispute resolution service, and the First-tier Tribunal. Each step runs to a time limit, and some of those limits settle the dispute on HMRC’s terms if they pass without action.

Which HMRC decisions can be appealed

Each right of appeal comes from the legislation behind the decision, and HMRC’s appealable decisions generally set out the appeal rights that go with them.

For income tax and capital gains tax, section 31 of the Taxes Management Act 1970 gives a right of appeal against:

• an amendment HMRC makes to a self-assessment during an enquiry
• a conclusion stated, or an amendment made, in a closure notice at the end of an enquiry
• any assessment that is not a self-assessment, including a discovery assessment

Companies have the same 30 days to appeal an assessment, under Schedule 18 to the Finance Act 1998.

Other decisions carry their own rights of appeal. A penalty for an error in a return can be appealed through the same review and tribunal stages as an assessment; see our guide to penalties for careless and deliberate errors, and for fixed penalties, late filing penalties and penalty points.

An information notice sent to a taxpayer under Schedule 36 to the Finance Act 2008 can also be appealed, except for a requirement to provide information or documents that form part of the taxpayer’s statutory records, or where the tribunal approved the notice in advance. The tribunal’s decision on that appeal is final. See compliance checks.

A Simple Assessment works differently. The right of appeal does not arise until the person has queried the assessment with HMRC and received a final response.

The 30-day time limit

For most HMRC decisions the limit is 30 days. For income tax and capital gains tax, the notice of appeal must be in writing, must state the grounds, and must be given to the officer who made the decision within 30 days after the date the amendment, closure notice or assessment was issued. HMRC’s own guidance counts from the date the decision is posted, not the date it is received. GOV.UK suggests saying what is disputed and why, and setting out the figures believed to be correct.

Income tax and corporation tax: appeal to HMRC first

For direct taxes such as income tax, capital gains tax and corporation tax, the appeal goes to HMRC first, not to the tribunal. Once it has been made, section 49A of the Taxes Management Act 1970 allows three ways forward.

HMRC offers a review. HMRC can write setting out its view of the matter and offering a review. The appellant then has 30 days from the date of that letter to accept the offer or notify the appeal to the tribunal. If neither happens, the appeal is treated as settled on HMRC’s view, with no right to withdraw from that settlement. After that, the tribunal can hear the appeal only with its permission.

The appellant asks for a review. This can be done at any time after appealing, unless HMRC has already offered a review or the appeal has gone to the tribunal. HMRC must give its view within 30 days of receiving the request, or a longer period that is reasonable, and then carry out the review.

The appellant goes to the tribunal. The appeal can be notified straight to the tribunal, as long as HMRC has not already offered a review or given its view following a request for one.

The appeal can also be settled by agreement with HMRC at any point. An agreement has the same effect as a tribunal decision on those terms, but the appellant can withdraw from it in writing within 30 days.

How an HMRC statutory review works

A statutory review is carried out by an HMRC officer in a different team who was not involved in the original decision. It must take account of representations made in time for HMRC to consider them, and it can uphold, vary or cancel HMRC’s view.

The review must be finished within 45 days, or another period agreed. The 45 days run from the day HMRC gave its view, if the appellant asked for the review, or from the day HMRC received the acceptance, if HMRC offered it. A review not finished in time is treated as having upheld HMRC’s view, and HMRC must tell the appellant so.

What happens next turns on one date. The conclusions are treated as an agreement settling the appeal, with no right to withdraw, unless the appeal is notified to the tribunal within 30 days of the date of the review conclusion letter. After that, the tribunal’s permission is needed.

VAT appeals: review or tribunal

VAT works the other way round. There is no appeal to HMRC: a VAT appeal lies to the tribunal. When HMRC notifies an appealable VAT decision, it must offer a review at the same time. From the date of the decision letter there are 30 days either to accept the review or to appeal to the tribunal.

The two are alternatives: a review offer cannot be accepted once an appeal has gone to the tribunal. HMRC can extend the 30 days, but the request has to be made within them.

A VAT review must be finished within 45 days of HMRC receiving the acceptance, or another agreed period. If it is not, it is treated as upholding the decision. An appeal to the tribunal can then be made within 30 days of the date of the review conclusion letter.

If the 30 days to accept a review have passed, HMRC must still carry one out where there was a reasonable excuse and the request was made without unreasonable delay once the excuse ended. A late appeal to the tribunal needs the tribunal’s permission.

GOV.UK says excise duty, customs duty and other indirect taxes can usually be appealed straight to the tribunal too, but they have their own provisions.

Alternative dispute resolution with HMRC

Alternative dispute resolution (ADR) is HMRC’s mediation service. An HMRC officer trained in mediation works with the taxpayer and the officer handling the case, as a neutral and impartial mediator.

It is not a ruling. The mediator does not decide who is right, and HMRC’s factsheet says the mediator “will not suggest or impose solutions”. Any agreement has to be acceptable to both sides, and HMRC says it can be provisional until approved internally.

ADR is not a statutory process, and HMRC can turn down applications it does not think suitable. HMRC’s guidance says it can be used:

• during an enquiry, at any stage
• after a direct tax decision that has been appealed, once HMRC has accepted the appeal without offering a review; otherwise, only after any accepted review has ended and the appeal has gone to the tribunal and been acknowledged
• after a VAT or other indirect tax decision, once any accepted review has ended and the appeal has gone to the tribunal and been acknowledged
• during tribunal proceedings, at any stage

Some disputes are excluded, including cases handled by HMRC’s criminal investigators, tribunal cases categorised as paper or basic, automatic late filing and late payment penalties, and debt or payment problems.

ADR does not affect the right to appeal or to ask for a statutory review. HMRC’s guidance does not say that applying stops any appeal deadline, so the deadlines need protecting regardless.

The First-tier Tribunal (Tax Chamber)

The First-tier Tribunal (Tax Chamber) hears tax appeals. It is administered by HM Courts & Tribunals Service, not by HMRC. An appeal can be made online or by post on form T240, with a copy of the decision or review conclusion letter, the result sought and the grounds.

The four case categories

The tribunal allocates every case to a category, and can move it to another at any time.

In a Default Paper case, the tribunal must hold a hearing if any party asks for one in writing.

Costs

In most tax appeals each side bears its own costs. The tribunal can award costs only for wasted costs, or where a party or its representative has acted unreasonably in bringing, defending or conducting the case.

Complex cases are the exception. There, the tribunal can also order one side to pay the other’s costs, unless the taxpayer asks in writing, within 28 days of being told of the allocation, for the case to be excluded. Opting out removes that wider exposure to HMRC’s costs, and with it the chance of recovering one’s own.

Who can represent a party

The tribunal’s rules allow a party to appoint a representative who need not be a lawyer, so an accountant or tax adviser can act. The representative can do anything the party can under the rules, except sign a witness statement. Where the representative is not a practising solicitor or barrister, the tribunal asks for an authorisation form.

What the tribunal can decide

On an appeal against an assessment, the tribunal reduces it if the appellant is overcharged, and increases it if the appellant is undercharged. Otherwise it stands.

Paying the tax while you appeal

Direct tax: postponing tax pending an appeal

An appeal does not, by itself, stop the tax being due. Unless postponed, it is payable as if there were no appeal.

To postpone it, a separate written application must be made to HMRC within 30 days of the date the amendment, assessment or closure notice was issued, stating the amount believed to be overcharged and why. There must be a valid appeal first. The amount postponed is the amount for which there are reasonable grounds for believing the tax is overcharged. If it cannot be agreed, the application can be referred to the tribunal within 30 days of HMRC’s decision letter, and the tribunal’s decision is final. A later application is possible if circumstances change, or where a late appeal has been accepted.

Postponement is not a reduction. If the postponed tax turns out to be due, interest is charged on it.

VAT: pay or deposit, or make a hardship application

For an appeal about the VAT due, such as an appeal against a VAT assessment or about the VAT charged on a supply, and for some related appeals, the tribunal will not hear the appeal unless the amount HMRC has decided is payable as VAT has been paid or deposited with HMRC.

The exception is hardship. The appeal goes ahead without payment if HMRC accepts, on the appellant’s application, that paying would cause hardship, or, where HMRC does not, the tribunal decides that it would. The tribunal’s decision on hardship is final, and the appeal does not move forward until it is made. GOV.UK says HMRC does not collect disputed VAT while a review is under way.

Penalties

A penalty under appeal does not normally have to be paid until the appeal is settled. For penalties for errors in a return this is written into the legislation, and GOV.UK says the same of appealed penalties generally.

If the difficulty is paying an amount that is not in dispute, see our guide to HMRC Time to Pay arrangements.

Applying to the tribunal for a closure notice

If HMRC has opened a formal enquiry into a return and it has run on, the taxpayer can apply to the tribunal for a direction requiring HMRC to issue a closure notice within a specified period. The application can cover the whole enquiry or one matter within it, through a partial closure notice. For individuals and trustees the power is in section 28A(4) of the Taxes Management Act 1970; for companies, paragraph 33 of Schedule 18 to the Finance Act 1998.

The tribunal must give the direction unless it is satisfied that HMRC has reasonable grounds for not closing the enquiry, or the matter, within the period. HMRC’s guidance says these applications are usually categorised as Basic cases. GOV.UK offers an online route or form T245.

A direction does not decide the tax. It requires HMRC to state its conclusions, which can then be appealed in the usual way.

Late appeals to HMRC and the tax tribunal

To HMRC, for direct tax. An appeal can be made after the 30 days if HMRC agrees or, where HMRC does not, the tribunal gives permission. HMRC must agree if the appellant asks in writing, had a reasonable excuse for not appealing in time, and made the request without unreasonable delay after the excuse ended.

To the tribunal. A late VAT appeal, a direct tax appeal HMRC would not accept late, and an appeal notified after a review’s 30-day window all need the tribunal’s permission. The notice of appeal must ask for permission and explain why it is late.

The tribunal’s approach comes from the Upper Tribunal in Martland v HMRC [2018] UKUT 178 (TCC). The starting point is that permission should not be given unless the tribunal is satisfied, on balance, that it should be. It then works through three stages:

1. How long was the delay, and was it serious and significant?
2. Why did it happen?
3. Weighing all the circumstances: the reasons for the delay against the prejudice to each side of granting or refusing permission, giving particular weight to cases being run efficiently and to statutory time limits being respected.

The tribunal can take account of an obvious strength or weakness in the underlying case, but should not turn the application into a trial of the merits. A shortage of funds, or being unrepresented, should not generally count in explaining a delay. Because the length of the delay comes first, a late appeal should go in as soon as the missed deadline is noticed.

Appeals to the Upper Tribunal

A First-tier Tribunal decision can be appealed to the Upper Tribunal (Tax and Chancery Chamber), but only on a point of law, and only with permission. Either party can appeal, so HMRC can too.

• If the tribunal gives only a summary decision, a party must first ask for full written findings and reasons. Since 2 March 2026 that request must reach the tribunal within 14 days of the decision notice. It was 28 days before.
• Permission is then sought from the First-tier Tribunal within 56 days of the latest of several dates, which include the date the full written reasons are sent.
• If the First-tier Tribunal refuses, permission can be sought from the Upper Tribunal itself within one month of the refusal being sent.

The costs position changes here. The Upper Tribunal can make costs orders on appeals from the Tax Chamber, so the risk of paying the other side’s costs is wider than below. A further appeal on a point of law can go to the Court of Appeal, or the Court of Session in Scotland, again only with permission.

When to get help

The steps are not complicated in themselves. The choices made in the first 30 days decide which options remain open:

• whether to accept a review, ask for one, or go straight to the tribunal
• whether to apply to postpone the tax, which has its own 30-day limit
• for VAT, whether to pay or deposit the tax, or apply for hardship
• whether the grounds go to the amount, to whether HMRC could make the decision at all, or both

Help is most useful before a review concludes, because a conclusion not taken to the tribunal within 30 days settles the appeal. If a deadline has passed, act quickly rather than assume the position is closed.

Sources

• Taxes Management Act 1970, section 28A (completion of enquiry, and applications to the tribunal for a closure notice), sections 31 and 31A (right of appeal and notice of appeal), section 49 (late notice of appeal), sections 49A to 49I (HMRC review and notifying the tribunal), section 50 (tribunal’s powers), section 54 (settling appeals by agreement) and section 55 (postponement of tax)
• Finance Act 1998, Schedule 18, paragraph 33 (direction to give a closure notice) and paragraph 48 (company appeals against assessments)
• Finance Act 2007, Schedule 24, paragraph 16 (procedure on penalty appeals)
• Finance Act 2008, Schedule 36, paragraphs 29 and 32 (appeals against information notices)
• Value Added Tax Act 1994, section 83 (appealable matters), sections 83A to 83G (reviews and bringing appeals) and section 84 (payment or deposit, and hardship)
• Tribunals, Courts and Enforcement Act 2007, sections 11 and 13 (onward appeals on a point of law)
• Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), rules 10 (costs), 11 (representatives), 20 (starting an appeal), 23 (case categories), 26 and 29 (hearings), 35 (decisions and reasons, as amended from 2 March 2026 by SI 2026/115) and 39 (permission to appeal)
• Tribunal Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698), rules 10 (costs) and 21 (applying to the Upper Tribunal for permission)
• Martland v HMRC [2018] UKUT 178 (TCC), paragraphs 44 to 47
• HMRC, “Disagree with a tax decision” and “Appeal to the tax tribunal” (GOV.UK)
• HMRC, “Tax disputes: alternative dispute resolution (ADR)” and factsheet CC/FS21 (GOV.UK)
• HMRC Appeals, Reviews and Tribunals Guidance manual, ARTG2160, ARTG2180, ARTG2510, ARTG2560, ARTG7550, ARTG7570 and ARTG8350

This guide is general information, not advice on any particular case.