UK200Group tax specialists respond to consultation on court and tribunal fees
Members of the UK200Group tax panel have called on the government not to proceed with proposals to increase fees for tax tribunals, as they feel it could affect taxpayer’s access to justice.
Under the proposals put forward by the Ministry of Justice (MoJ), first tier and upper tribunals could charge from £50 to £2,000 to contest a decision made by HM Revenue & Customs (HMRC), depending on whether or not the case goes to a full hearing and based upon its complexity.
In a letter written to the MoJ, Andrew Jackson, chair of the UK200Group tax panel and head of tax at Fiander Tovell LLP, said: “We consider that the Tax Tribunals represent a special case, significantly different from other tribunals, in that all cases heard by the tax tribunals involve taxpayers defending themselves against monetary liabilities being imposed on them by HM Government.
“To require a taxpayer to pay a fee to HM Courts & Tribunals Service in order to defend themselves against a purported requirement to pay tax, interest or penalties to HM Revenue & Customs seems to us to be entirely inequitable and unjust.
“It would put the taxpayer in a catch-22 position of having to make a payment to HM Government in order to prove that no payment to HM Government was due.”
He added that such an increase would open up the “possibility of moral hazard”, as a large number of disputes may relate to trivial amounts, such as a £100 penalty for the late filing of a return, which few taxpayers are likely to pursue if they are required to pay £250 for a hearing.
Andrew continued: “There is already considerable disquiet in the tax profession about the costs of professional representation, which are thought to discourage small appeals. As costs are rarely awarded in tax cases, there is a perception of inequality of arms as HMRC has essentially unlimited resources to pursue cases regardless of the amount at stake.”
He and the other members of the UK200Group Tax Panel have called on the government to create an exemption in the case of tax tribunals, as the government has a financial interest in the outcome of the case.