Taxpayers challenging HMRC increasingly likely to come out on top, says study

A new study has revealed that UK taxpayers who challenge HM Revenue & Customs (HMRC) are increasingly likely to come out on top.

The news comes after data analysed by law firm Pinsent Masons found a significant rise in the number of taxpayers ‘getting the results they want’, while tax authority decisions were increasingly being amended or ‘thrown out’ at Tribunals.

Pinsent Masons found 57 per cent of cases re-assessed by a secondary HMRC officer had found in favour of the taxpayer for the year to 31 March 2016.

Furthermore, research from HMRC themselves highlighted that the number of decisions appealed to an independent Tribunal which fell in favour of the taxpayer had increased by 5 per cent in the last year.

Such decisions sat at 18 per cent in the 2015/16 financial year, comparable with 13 per cent in 2014/15.

Pinsent Masons’ spokesperson, Heather Self, suggested that the majority of HMRC wins could be attributed to complex tax avoidance cases, whereas smaller, less complicated disputes were increasingly ‘falling in favour’ of taxpayers.

“Many of HMRC’s recent successes relate to complex avoidance schemes implemented some years ago. We are now seeing them challenge straightforward commercial planning, and expect taxpayers to win an increasing proportion of future cases,” she said.

Taxpayers seeking action against the Revenue can challenge HMRC by either a review, or a full appeal.

For the past six years, taxpayers have also had the right to challenge individual HMRC officers by insisting that a secondary HMRC officer reassesses a previous decision.

“Assuming your adviser thinks it is sensible, challenging an unfair or disproportionate action by the Revenue is worthwhile,” Said Ms Self.