Get the process right, or it could cost you

On 16 January, an appeal made by Ms Yaxley against a tax calculation for 2017/18 was struck out by a tribunal. The case centred around the process followed where the taxpayer differed in opinion to HMRC on the calculation of tax due. Ms Yaxley sent several letters to HMRC over the years since 2019 stating her appeal, desire to make an overpayment relief claim and providing alternative tax calculations, however as time went by Ms Yaxley found herself beyond the deadline to amend her 2017/18 tax return and beyond the deadline for an overpayment relief claim.

Despite escalating her frustration by lodging a complaint at HMRC’s seemingly deliberate lack of acknowledgement, and the long delays in correspondence compounding the risk of missed deadlines, this did not change the fact that the deadlines had passed.

The crux of the irritation the taxpayer was experiencing was that despite the taxpayer believing the objective of their correspondence was obvious, the wording of the letters sent to HMRC failed to include specific terms in the form prescribed by law. In failing through this correspondence to achieve the desired outcome for her 2017/18 tax calculation, the taxpayer pursued an appeal to tribunal. Ultimately however the appeal was struck out because the tribunal had no jurisdiction, having found that HMRC had correctly applied the law.

The judge’s damning remarks in the concluding statements reflect that HMRC was less than helpful throughout the many interactions with Ms Yaxley and could have, on many occasions, supported the taxpayer by pointing out relevant deadlines and the appropriate process to follow. These comments come against the backdrop of similar remarks from the Public Accounts Committee, which last week released its report condemning HMRC’s customer service to new lows and accusing HMRC of deliberately poor service.

Given that taxpayers and their advisors have no choice but to engage with HMRC, this case teaches us that whilst we are hopeful that the result of increased funding will see HMRC’s service levels improve, taxpayers would be wise to exercise caution in ensuring claims and reliefs are appropriately made. Taxpayers should ensure they stay on the front foot to protect their tax positions, and ensure the correct process is followed and deadlines met, rather than relying on HMRC to help.