COMPLIANCE
Let’s start with HMRC… Many HMRC enquiries are settled on an equitable and fair basis by informal agreement with a contract settlement. But what happens if you don’t agree with HMRC’s stated views? If HMRC has issued a tax decision you don’t agree with, you have several choices. You can: l ask for a statutory review (https:// ow.ly/NhJU50Q5vU9). This should be carried out by a HMRC officer who is independent of the original decision l use HMRC’s alternative dispute resolution process (https://ow.ly/ vyeT50Q5vVZ). This involves an impartial and neutral HMRC mediator actively assisting parties in working towards resolving a tax dispute outside of the tribunal or court. The parties in dispute have ultimate control of the decision to settle l appeal to the tax tribunals and the higher courts. "If HM Revenue and Customs has issued a tax decision you don’t agree with, you have several choices" Appeals to the tribunals Unless it’s a very complex case, your appeal will be heard by the First Tier Tax tribunal (FTT), which is a fact-finding tribunal. Appeals through the Upper Tier Tribunals (UTT), Court of Appeal (CoA), Supreme Court, etc., can only be on points of law, and you need permission to appeal to these higher courts. The UTTs do sometimes refer cases back to the FTT to reconsider. FTT decisions aren’t binding precedent, but they may be taken into consideration. In cases involving similar facts, the FTTs have come to different decisions in different tax years. Judgments in the UTT and higher courts are binding on the lower courts. It’s very rare for costs to be awarded by the FTT, but this can happen where the FTT is unhappy with the conduct of a party. In UTT cases, the loser normally pays the winner’s costs, which can be very high. If an HMRC decision isn’t appealable, the alternative option is to seek a judicial
review (JR). This is a way of challenging the decisions or actions (and sometimes the failure to act) of a public body, because it hasn’t acted lawfully. The UTT also hears JR cases involving tax. How about settling disputes with employees? If your employees raise concerns about money owed to them, and this cannot be resolved between the two of you, the next level of escalation will be to the employment tribunal (ET). Employees can raise complaints to the ET relating to, but not limited to: l owed holiday pay l failure to pay the national minimum wage (NMW) l underpayments of wages. These types of monetary claims will usually be brought as unlawful deductions from wages claims, under the framework set out by the Employment Rights Act 1996 or through a breach of contract claim. Breach of contract claims in the tribunal can only be brought upon termination of employment, so employees remaining in employment may only be able to bring an unlawful deduction from wages claim. It’s important to note that if an employee complains about not being paid the NMW, they can only bring a claim in the ET or use HMRC’s complaints procedure, as they cannot progress the matter through two legal routes. See here for further information: https://ow.ly/ v2v950Q5wsW.
Tribunal (EAT) or a party to the proceedings can apply for a ‘reconsideration’ of the ET decision on certain grounds. For example, an application for reconsideration can be made where: l an administrative error resulted in a wrong decision
l there’s new evidence available l a party wasn’t notified of the proceedings as of the date of the judgment.
Appealing to the EAT A party can usually only appeal to the EAT on a point of law. The EAT often won’t interfere if a party is unhappy with factual determinations by the ET, unless it’s found that the facts of the case have been interpreted ‘perversely’. CoA If you’re not content with the decision by the EAT, you can appeal to the CoA (civil division). There’s a ‘sift’ stage, and permission from a judge is required to proceed with such an appeal. The grounds of the appeal must state clearly why the EAT’s decision was wrong or unjust because of a serious irregularity. Supreme Court The Supreme Court is the final avenue of appeal in the United Kingdom. To appeal to the Supreme Court, a party must first seek permission from the CoA (or the Supreme Court itself) to do so. There are limited circumstances in which an appeal to the Supreme Court will be permitted, which are laid out by numerous statutory instruments. You cannot appeal a Supreme Court decision, and its judgment will be final. n "Breach of contract claims in the tribunal can only be brought upon termination of employment, so employees remaining in employment may only be able to bring an unlawful deduction from wages claim"
The Advisory, Conciliation and Arbitration Service (Acas)
To raise an ET claim, an employee must first notify Acas of their intention to do so. Depending on the employee's willingness to do so, Acas can assist in conciliating and mediating between the parties to reach an early settlement. Should your employee bring an ET claim without presenting an Acas early conciliation certificate, then you could likely argue that the claim has a substantive defect and shouldn’t proceed (there are, however, a few exceptions to this).
How can you challenge an ET decision?
Reconsideration The tribunal, the Employment Appeal
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| Professional in Payroll, Pensions and Reward |
Issue 96 | December 2023 - January 2024
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