How Accountants Help with Tax Return Appeals? Guide for UK Taxpayers

Millions of taxpayers must file a self-assessment every year, but many miss the filing deadline. Missing a deadline can lead to HM Revenue and Customs (HMRC) penalties.

Receiving a penalty or an unexpected tax calculation from HMRC can be stressful. However, you have to check that you do not receive an unfair or incorrect assessment. If you have, you can challenge an HMRC decision through the appeals process. This is where an accountant can help.

This guide explains how accountants help with tax return appeals by checking the relevant records, identifying errors or misunderstandings, preparing supporting evidence, and helping you communicate your position to HMRC.

What Is a Tax Return Appeal?

A tax return appeal is a formal written request asking a tax authority to reconsider a tax decision, adjusted figures, or a penalty. Usually, for direct taxes, an appeal must reach HMRC within 30 days of the date HMRC issued the decision notice.

If you miss the deadline, you will need to give a reason. You can challenge the penalty in different ways, depending on whether it’s direct or indirect tax.

Furthermore, an appeal should state the grounds of appeal and identify the decision being challenged. Keep in mind that not every HMRC decision carries a right of appeal.

Why HMRC Issues a Penalty and Can It Be Cancelled?

Before understanding how accountants help with tax return appeals, it is important to know why HMRC may charge you a penalty.

HMRC issues a penalty when a taxpayer fails to meet a legal tax obligation. For example, HMRC may charge you a penalty if you send a tax return late, pay tax late, or submit an inaccurate return. Failing to keep adequate records can also lead to an HMRC penalty.

However, if you believe the penalty is not fair, you have the right to appeal. If you disagree with the penalty, you will need to explain why to HMRC. For instance, if you think the penalty is wrong or if you have a reasonable excuse.

How Accountants Help with Tax Return Appeals

Accountants can help you with the HMRC tax appeal process by assessing the validity of your penalty and gathering the right evidence for a reasonable excuse. They can also help you communicate directly with HMRC on your behalf.

Review HMRC Tax Decision

The first thing an accountant can do is carefully examine the HMRC decision and compare it with your records and original return. They also review what HMRC has changed or challenged, whether the figures are correct, whether deductions or reliefs have been treated correctly, and the amount actually in dispute. This helps accountants to find whether there are reasonable grounds for an appeal.

Checking the Original Tax Return

Checking your original tax return is how accountants help with tax return appeals. They can examine the tax return alongside supporting records such as invoices, receipts, payroll information, bank statements, and business accounts.

Scrutinising the original tax return is important, particularly for self-employed taxpayers and business owners. The goal is not to manufacture evidence for an appeal, but accountants should establish the correct position from genuine records. They should also clearly explain any discrepancies.

Preparing the Grounds of Appeal

For a direct tax appeal to HMRC, the grounds of appeal must be included. An appeal must be made in writing, sent to HMRC within the relevant time limit, and include the grounds on which the decision is being challenged.

This is how accountants help with tax return appeals: They can help turn complicated financial information into a clear explanation. For instance, rather than simply stating that an assessment is wrong, an accountant can help identify the specific figure being disputed and explain how the correct figure is calculated.

Gathering Supporting Evidence

When challenging a tax assessment, having strong supporting documentation can be crucial. Depending on the dispute, relevant evidence may include accounts and tax computations, invoices and receipts, bank statements, payroll records, expense records, and calculations supporting deductions or reliefs.

You should organise evidence properly so HMRC can understand the taxpayer’s position with ease.

Choosing the Best Appeal Submission Method

Knowing how accountants help with tax return appeals involves selecting the right way to communicate with HMRC. Usually, accountants utilise professional tools to expedite the process:

Accountants can help you choose the appropriate method for submitting an appeal to HMRC.

Written appeals: Accountants can appeal in writing and send it to HMRC, following the instructions in the decision notice.

Online appeals: Where available, an appeal can be submitted through HMRC’s online services or an authorised agent’s online service.

SA370 and SA371: These forms are used for Self Assessment penalty appeals, and they should not be described as general tax appeal forms. SA370 is used for individuals, whereas SA371 is used for partnerships.

Help if the Dispute Reaches the Tax Tribunal

If an HMRC tax appeal cannot be resolved, you may be able to take the matter to the First-tier Tribunal (Tax). At this stage, understanding how accountants help with tax return appeals can be particularly important because they can assist with the financial evidence, calculations and supporting documentation.

Usually, the tribunal deadline is 30 days. However, the starting point depends on the circumstances. Following a review, for example, the deadline is generally 30 days from the review conclusion letter.

How to Appeal a Self Assessment Penalty?

If you believe that the HMRC penalty is unfair or incorrect and disagree with the penalty for late filing or late payment, you can appeal to HMRC. First of all, you will need to explain why the penalty should be cancelled. State if there is a reasonable excuse or HMRC made an error.

Normally, you have 30 days from the date on the penalty notice to appeal. You can appeal online where the service is available. If you do not want to use the online service, you can use form SA370 for an individual or SA371 for a partnership and submit the appeal by post.

Your appeal should provide the relevant dates and explain the reasons that prevented you from filing your return or paying your tax on time. And, if you appeal late, you should explain why it is late.

Furthermore, if HMRC rejects the appeal, you can request an HMRC review. You may be able to appeal to the tax tribunal if the dispute remains unresolved.

Final Thoughts on How Accountants Help With Tax Return Appeals

To sum up, working with a tax accountant for HMRC appeals is an effective way to protect your rights and reduce financial penalties. They can review calculations and records, prepare supporting evidence, help explain the grounds of appeal, and assist with an HMRC tax review.

If you have complex tax disputes, it is best to obtain professional advice early. This can help ensure that your calculations, evidence and procedural requirements are properly considered.

At AccountingFirms, we help you find the best accountants who can help you with your tax return appeals effectively. Search, compare, and select an accountant in no time.

Disclaimer: The information provided on AccountingFirms.co.uk is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.