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A5.625 HMRC internal review

To coincide with the introduction of the tribunal system on 1 April 2009, a dispute resolution procedure was also introduced, whereby a taxpayer has the statutory right to request an internal review of an HMRC decision, as a way of reaching an agreement without the need to go to the tribunal¹.

Almost every appealable decision about tax issues can be the subject of internal review, and the aim of the process is to provide a proactive and less costly way to resolve disputes. Under the previous system there was generally no review procedure in place for direct tax and for VAT there was a comparatively informal arrangement under which HMRC encouraged taxpayers who disagreed with a decision to seek a reconsideration of the decision by the VAT office which made the decision before instigating appeal proceedings.

HMRC deals with around 250,000 appeals a year, mostly in the direct tax field, and the internal review procedure has reduced the number of appeals that go to the tribunal. Use of the review process is not compulsory,