As highlighted in the recent HMRC Agent Update (Issue 75) if HMRC makes an appealable decision and the taxpayer disagrees with it, they can have the decision reviewed. Below is a summary of what to expect from a statutory review.

The Agent Update also provides details of the Alternative Dispute Resolution (ADR) service, which involves an impartial HMRC mediator working with all parties to
prevent unnecessary litigation. ADR does not affect the taxpayer’s right to appeal or review.

What to expect from a statutory review

Who carries out a review?

If HMRC makes an appealable decision and your client disagrees with it, they can
have the decision reviewed.

When making a decision, HMRC will explain how to have a review. An individual from a specialist team of review officers within HMRC’s Solicitor’s Office and Legal Services national review business will carry out the review. The review officer will not have been involved in the original decision.

Review officers are independent of the directorates where the compliance decisions
are made. Although they are independent of the caseworker, they need to take into
account wider HMRC policy in reaching decisions. If your client wishes to challenge
HMRC’s interpretation of the law, guidance or policy, they have the opportunity to
do so at Tribunal.

Purpose of a review

The purpose of the review is primarily to look at the decision again, not to assess new facts or evidence provided with the review request. However, the review officer will give your client the opportunity to send in further information during the review period. If substantial amounts of new information is provided, the review officer may
return the information to the caseworker as this may settle the dispute. If not, the review officer will look at it.

Starting a review

When an officer makes an offer of a review, your client will have 30 days to accept that offer. However, within indirect tax legislation, it is possible to extend that period if the request is made before the 30 day period ends. This may be useful if there is a
large amount of new information or arguments that need to be considered, and you
believe it would be better if the caseworker considers it first.

Please note it is not legally possible to extend the 30 day period for any direct tax decision.

If your client requests a review of a direct or indirect tax decision, after the 30 day period ends, then HMRC may accept the request. This depends on whether your client has a reasonable excuse for the delay.

Review procedure

On allocation of the case, the caseworker will provide the review officer with their
case papers and information they relied on in making their decision.

When the review officer receives a case to review, they will write to your client to
introduce themselves. They will also explain when they will conclude the review.

They will also give your client the opportunity to send in any further information or
arguments for consideration.

The review officer will decide if the decision is

• legally and technically correct
• consistent with HMRC’s policy, and
• consistent with HMRC’s Litigation and Settlement Strategy.

The review officer will not normally contact the caseworker or discuss the case with them. But, they may contact the caseworker to understand the decision better, to
locate documents or to clarify evidence.

Outcomes of a review

At the end of the review, the review officer will conclude if the decision is:

• upheld; that is, the decision your client disagreed with should stand
• varied; that is, the decision is changed in some way, or
• cancelled; that is, the decision is not appropriate.

The review conclusion letter

Whatever the outcome of the review, the review officer will write to your client (and
send a copy to you, where appropriate). This will explain:

• their conclusion
• their reasons
• what are the next options.

If the review officer upholds or varies the decision, the review conclusion letter will
include:

• introductory comments – this will say the review officer has concluded their review, it will also include a brief summary of their conclusions
• details of each of the reviewed decisions
• a summary of the points at issue – these are the reasons for the dispute
• relevant legislation and case law
• a facts section summarising details of the case
• an explanation of the review officer’s conclusions with reference to the facts, evidence, legislation and case law
• a summary of the conclusions and amounts due (if applicable) information on what happens next, what your client’s options are, and where they
  can find further information.

If the review officer cancels a decision the letter will normally be shorter. But it will
still explain what they have reviewed and the reasons for cancellation. It will also
inform your client that the review officer has instructed the caseworker to cancel
the decision.

Review deadline

The review officer will aim to complete the review as quickly as possible. The
statutory period for conducting a review is 45 days. This period can be extended by
agreement. If a review is not concluded in 45 days, or a longer agreed period, the
decision is deemed to be upheld. Restoration decisions must be completed in 45 days.

What should you do?

Sometimes resolving disputes at tribunal is the only option, but generally it is more
cost effective to resolve disputes before they reach that stage. So, it is important that
your client provides all the information that the review officer needs to carry out their review. It is useful if your client explains what they disagree with, and why. Did they
rely on any case law or evidence to form that view? It is also useful to know what your
client does agree with, as this will help focus the review to the key points in dispute.

More Information

A more senior officer usually countersigns the completed review for accuracy and
consistency. Another review officer may also check it before it is sent to your client.
HMRC use the review process to learn and improve the quality and consistency of
decision making.

Your client can only have a decision or assessment reviewed once. If they are not
satisfied with the review officer’s conclusion they may appeal to the Tribunal within
30 days.

There is no legal basis to carry out a second review even if you or your client provide
new information. For more information please see the Appeals reviews and tribunal
guidance manual.