Tax tribunal nightmare: companies waiting more than a year for decisions

Tax tribunals can now take a year or longer to return decisions, according to a damning new report for the Institute of Fiscal Studies.

The think tank’s Tax Law Review Committee based its report on a survey of first-tier tribunal (FTT) users, mainly barristers and solicitors. They reported concerns over delays, a lack of communication by the administration, a lack of engagement by some judges during hearings and the allocation of some cases to judges without the appropriate knowledge or skill.

The report said: “A major cause of dissatisfaction among tribunal users is delay. This existed before the Covid-19 pandemic. Many respondents attribute delays to the FTT judiciary: both through a lack of robust case management and because of delays in writing up decisions, which can sometimes be over one year.”

The report added: “In addition to delay, many research participants also expressed concerns about a lack of communication with the FTT administration. The respondents felt that it was not easily contactable and did not communicate with them…

“Some tribunal users also report a lack of engagement by some judges during the hearing, which they attribute either to a lack of judicial preparation for the hearing or to the judge not having the necessary knowledge or skills to hear that particular case.”

 

In response, the President of the First Tier Tribunal Tax Chamber, Greg Sinfield, said the chamber has already begun to address some of the issues raised.

Ian Anfield, managing director of Hudson Contract, said: “The report highlights many areas of concern, not least the length of time it takes for the tribunal to return decisions.

“If they get employment status wrong, company directors, who just want to get on with growing their businesses could find themselves embroiled in lengthy cases, sometimes taking years to resolve.

"Anyone who has been through a HMRC status or VAT compliance review lately will know that dealing with them is bad enough, even in cases where they eventually give the all clear. When cases end up in court, the stress, disruption and costs ramp up to a whole new level.

"HMRC’s most high-profile status case ongoing at the moment is a challenge to the self-employed status of elite football referees (PGMOL Vs HMRC). The case started in 2017 and after a trip to the FTT in 2018 and Upper Tribunal in 2020 - was 2-0 to the refs.

"The Court of Appeal last week stepped in like VAR and took it back to nil-all going into extra time. Only now, 4 years after it began, with hundreds of thousands of pounds spent on legal fees, and thousands of manhours devoted to dealing with the case, are the referees somewhere close to finding out whether they are cup winners as self-employed or relegated to the conference with backdated employment taxes to pay.

"With an away fixture to be scheduled at The Supreme Court or a return to the neutral venue of the FTT it is no doubt squeaky bum time for the entire team.

"Football analogies aside (or off-side), Hudson clients can make use of self-employed trades without the fear that they will get bogged down in disputes or the complexities of CIS compliance later. For more than 25 years Hudson has dealt with this so our clients don’t have to."

The report, 'The tax tribunals: the next 10 years' can be read here

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