It’s great news – apparently challenging HMRC pays off more than half of the time. On the other hand it’s dreadful news because it reveals how HMRC gets our tax matters wrong with worrying frequency. What’s going on?

New research highlights HMRC mistakes

Pinsent Masons LLP is an international law firm that ranks among the top 100 in the world by turnover. They’ve been looking at data which indicates that it’s entirely worthwhile to challenge an ‘unfair or disproportionate’ action by HMRC, because the chances of getting the decision overturned stack up to more than 50%.

According to new research, most of the challenges raised against HMRC by British taxpayers result in the original decision either being changed or thrown out altogether. In fact when a review of a tax ruling was examined by another HMRC official between March 2015 and March 2016, 57% per cent of cases were resolved in the taxpayer’s favour.

Good news – HMRC review teams are happy to question colleagues’ decisions

Since 2010 taxpayers have been allowed to either mount a full appeal or request a review of their case by an alternative HMRC officer. Even though concerns have been raised about the level of independence given to these review teams, the numbers reveal HMRC staff are not scared to question and correct their colleagues’ decisions.

Tribunals delivering more positive results for taxpayers

A proportion of cases end up at tribunal stage, and HMRC’s own data shows more taxpayers getting a positive result from a tribunal, too. According to Pinsent Masons, the number of successful appeals at tribunal went up by 13% in the 2014/15 tax year and 18% in 2015/16.

Why is HMRC getting it wrong so often? 

It’s worrying that 57% of taxpayer complaints turn out to be justified. It means HMRC is getting things wrong a shocking amount of the time. And it means it’s more important than ever to get your tax and VAT matters put to bed by a pro, someone with an in-depth understanding of the awesome complexity of the British taxation system, who can spot mistakes and avoid the need for an appeal. We can help you with that.