Deluged tax tribunals yet to shoulder AP cases

The ‘pay-up first’ avoidance rule is serving as a bung in the courts, where a record number of tax disputes have built-up and a new batch under the rule loom pending a lead case.

In fact, although numerous ‘Accelerated Payments’ (AP) cases are yet to filter through, almost 30,000 tax disputes were awaiting tribunal at the end of last year, figures reportedly show.

Obtained by the Financial Times, the figures show an 8.5% jump in the number of appeals to have gone before the first tier tax tribunal, equating to an unparalleled 29,566 disputes.

Unfortunately for HM Courts and Tribunals, which this month spoke of its tax chamber being “very busy”, its workload and backlog each seem set to worsen once AP cases proceed.

The tribunals will be hoping that a case with implications for 70% of Accelerated Payment Notices that are live yet waiting on the case’s outcome to be collected will cut the queue.

“This case failed for the taxpayer”, said Graham Webber of tax investigations specialists WTT Consulting, referring to a ruling earlier this month in HMRC’s favour.

“But… [we understand] that a request to appeal has been lodged. If this appeal is granted, the APN collection could be stayed even further.”

Mr Webber also told ContractorUK that due to a backlog of official responses to taxpayers’ disagreeing with APNs, the wait for HMRC might not end there.

He said: “HMRC has indicated to some of [our] clients that a response to representations made against their APNs will take a minimum of two months”.

Such a two-fold delay to collecting under the APN regime is why HMRC should find “an alternative route” to both receiving payments and alleviating the strain on the courts.

WTT added: “Sensible, fair and realistic settlement seems to be the most practical way to achieve this but as yet, in light of the error rate on CLSO calculations, this does not appear to be forthcoming.”

HMCT says it has hired additional judges and will continue to increase its administrative resources and the number of tribunal rooms in London available for tax cases.