A5: The UK Tax System and its Administration | The Procedures Relating to Compliance Checks, Appeals and Disputes (ACCA TX)

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The Procedures Relating to Compliance Checks, Appeals and Disputes explains the circumstances in which HM Revenue & Customs can make a compliance check into a self-assessment tax return and the procedures for dealing with appeals and First and Upper Tier Tribunals.

The Procedures Relating to Compliance Checks, Appeals and Disputes

a. Explain the circumstances in which HM Revenue & Customs can make a compliance check into a self-assessment tax return.[2]

A tax assessment may be opened if the HMRC is of the opinion that a taxpayer has paid too much or too little tax. A normal enquiry may can be opened 12 months from the date of submission.
Enquiries may arise due to:
  • understated income
  • incorrectly claimed deductions
  • other information possessed by HMRC
  • a random review
A discovery assessment may be raised if there is a more serious matter. If a discovery assessment is raised, the tax payers can lodge an appeal, but it must be done within 30 days.

b. Explain the procedures for dealing with appeals and First and Upper Tier Tribunals

Tax payers can appeal against amendments to their income tax return provided it is done within a certain timeline. Appeals must be made within 30 days of the amendment and they must state the grounds and reasons for the appeal. The appeals procedure follows VAT Chapter 25.
 
Tax appeals are heard by the Tax Tribunal which consists of two tiers. The First Tier Tribunal deals with most cases whilst the Upper Tribunal deals with complex cases that involve tax law issues, large amounts of money and appeals against decisions made in the First Tier Tribunal.

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