Opinion Former Article

Tax Tribunal fees an attack on access to justice, say tax advisers

The Chartered Institute of Taxation (CIOT) has criticised proposals by the Ministry of Justice to introduce fees for taxpayers wishing to take disputes - appealing a penalty notice for example - with HMRC to tribunal1. The Institute is arguing that an obligatory fee for cases to be heard in the First-tier Tribunal (FTT) Tax Chamber and Upper Tribunal (UT) Tax Chamber will adversely affect access to justice and is wrong in principle.

Taxpayers can appeal to the FTT, which is independent of government, when they dispute rulings made by HMRC. The Ministry of Justice has proposed fees of between £50 and £200 for referring cases to the FTT, with hearing fees to range from £200 to £1,0002. Appeals to the UT would incur an initial fee of £100 and up to £2,000 for a hearing.

Chris Jones, CIOT President, said:

“These proposals are counter-productive and wrong in principle. Rather than meeting the Government’s stated objectives3, the measures will increase bureaucracy and complexity, will fail to protect the most vulnerable taxpayers and are contrary to the interests of justice.

“Access to justice should be free to those who require it. Tax Tribunal cases are between the citizen and the state (and in most cases initiated by HMRC); in this context it is particularly perverse that in order to fight charges levied by one branch of government an appellant would be obliged to pay another division of government.

"We understand the rationale behind wishing to discourage frivolous or vexatious cases, or to cover part of the costs of running the Tribunal Service and we would accept that there is a good case for considering charges targeted at higher value tribunal disputes. However, the effect will be to deter some potential applicants, including many of modest means, and prevent them seeking access to justice when they have a perfectly good case.

“Cases involving financial hardship should always be exempt, so we are pleased to note that the HMCTS remission scheme will be made more generous.

“Many amounts pursued in the Tribunals are very small, and in this sense, the costs are disproportionate to the penalty at stake – the proposals indicate that a taxpayer appealing a late return filing penalty of £100 would have to pay a minimum of £50, adding a perverse cost-benefit dimension to pursuing such action.

“If the fee structure is introduced as proposed then in our view the successful party’s fees should be payable by the unsuccessful party.  The possibility of recouping the application fee will provide some balance and require a recognition by HMRC that taking a dispute to the Tribunal has a financial consequence.

“In the meantime, a radical overhaul is needed of HMRC’s reviewing processes in order to prevent cases getting to the Tribunal in the first place. The success of HMRC’s Alternative Dispute Resolution service testifies to the fact that Tribunals should be regarded as a last resort where possible.”

Notes to editors:

1. The response of the Chartered Institute of Taxation to the Ministry of Justice’s consultation on Court and Tribunal Fees can be read in full here.

2. Depending on the complexity of the case.  

3. The Ministry of Justice has stated that the proposals aim to ‘deliver faster and fairer justice for all; protect the weak and the vulnerable and promote equality of all before the law’.

4. The Chartered Institute of Taxation (CIOT)
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 17,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

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