Of 30,345 cases, HMRC's decision was overturned in 18,317, 60%, in 2011/12. Of the remaining 12,028, some 9,785 HMRC penalties (32%) were upheld the remaining balance of decisions varied upon appeal.
Jason Collins head of tax of Pinsent Masons is quoted by AccountancyAge:
"HMRC is operating under a lot of pressure to increase its revenues across the board, but this pressure is particularly acute in VAT. The NAO report highlighted the huge difference between the VAT HMRC believes it should be collecting, and the amount it actually does receive.A spokesman for HMRC said:
The fact that HMRC loses 60% of the penalty cases that businesses appeal shows that it may have become over-aggressive in hunting for cases of VAT evasion, and is making errors in issuing penalties. HMRC is also too quick to say a taxpayer has been negligent when it gets things wrong.
Unfortunately, it seems that thousands of UK businesses have been forced to challenge unfair fines as a result."
"Only a small proportion of the millions of decisions HMRC makes each year are challenged. The review and appeal system provides a quick and easy way to resolve disputes.It is unfortunate that fresh evidence/reasonable excuses only seem to come to light during the appeal, as this wastes the time a resources of both the taxpayer and HMRC.
Where we change a decision it is often because our customer has given us new information: for example, a reasonable excuse for their tax return being late, or fresh evidence to support a claim."
Tax does have to be taxing.
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