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    TaxKilnUK tax guidance
    TaxKilnUK tax guidance

    Tribunals + HMRC Enquiries → Statutory review + FTT procedure

    Statutory Review + First-tier Tribunal Tax Chamber Procedure — Form T240 + Martland v HMRC Late Appeal

    After most HMRC decisions there is a two-stage appeal route. First stage: 30-day statutory review under TMA 1970 s.49A-C (and equivalent provisions for VAT etc.) — conducted by an HMRC officer not previously involved. Second stage: appeal to the First-tier Tribunal Tax Chamber via Form T240 + statement of grounds, within 30 days of either the original decision (if review skipped) or the review conclusion. The FTT is governed by the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), which categorise cases as Default Paper / Basic / Standard / Complex — most penalty appeals are Default Paper or Basic (no costs risk, no oral hearing required). Late appeals are now governed by Martland v HMRC [2018] UKUT 178 (TCC) which adopted the three-stage Denton v TH White [2014] EWCA Civ 906 framework (seriousness/significance of delay + reasons + all-circumstances balance) — this is the operative lodestar, replacing earlier 'Medpro Healthcare' framings. Tinkler v HMRC [2021] UKSC 39 confirmed procedural service-of-notice mechanics. Most penalty + small-quantum appeals are self-serve; specialist counsel via tax chambers warranted only for substantive disputes.

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →

    In plain English

    Disagreeing with an HMRC decision is a structured two-step process. STEP 1: ask HMRC to review the decision themselves (statutory review under TMA 1970 s.49A-C). It is conducted by a different HMRC officer who had no involvement in the original decision, takes about 45 days, costs nothing, and pauses the appeal clock. STEP 2: if the review upholds HMRC (or you skipped it), appeal to the First-tier Tribunal Tax Chamber within 30 days using Form T240. You write a Notice of Appeal + a statement of grounds (what HMRC decided, why you say it's wrong, what statutory provision supports your view). The FTT then categorises your case under Rule 23 of the Tribunal Procedure Rules SI 2009/273. Categories: DEFAULT PAPER (e.g. fixed penalty appeals — decided on documents, no hearing, no costs risk); BASIC (simple oral hearing, light procedure, no costs risk); STANDARD (full procedure, no costs unless unreasonable conduct); COMPLEX (full procedure WITH costs by default — but taxpayer can opt out of costs within 28 days under Rule 10(1)(c)(ii)). Most penalty + small-quantum cases are Default Paper or Basic — fully self-serve. Missed the 30-day window? Late appeal is possible under TMA 1970 s.49 + the FTT's case-management powers in Rule 20(4). The lodestar authority is Martland v HMRC [2018] UKUT 178 (TCC), which applied the Denton v TH White [2014] EWCA Civ 906 three-stage civil-procedure framework: (1) is the delay serious or significant?; (2) why did it occur?; (3) evaluate all the circumstances — including the merits of the appeal + prejudice to HMRC + general interest in finality. The Tribunals are not generous with late-appeal applications, but Martland properly engaged usually succeeds where delay was modest + has explanation + merits are arguable. Procedure service: Tinkler v HMRC [2021] UKSC 39 dealt with whether a s.9A enquiry notice had been validly served when posted to an address HMRC had been told was no longer current. The Supreme Court held the notice was validly served because the taxpayer had not formally notified HMRC of the change in writing as the legislation required. Lesson: service is procedurally strict; address changes must be formally notified to HMRC; do not rely on informal channels.

    How it works

    Stage 1 — Statutory review (TMA 1970 s.49A-C)

    Within 30 days of an appealable HMRC decision you can: (a) accept the decision; (b) appeal to FTT directly under s.49D; OR (c) request a statutory review under s.49A. HMRC will write offering review if applicable. Review is conducted by a different officer (s.49E), typically completed within 45 days (extension by agreement). Review outcome: uphold / vary / cancel the original decision. Following review, taxpayer has 30 days under s.49G to notify appeal to FTT. Review is free, pauses appeal clock, and often resolves clear-cut decisions without need for tribunal — but for fact-specific reasonable-excuse or behaviour-band disputes, the same HMRC department applying the same rules often reaches the same conclusion. Useful filter; not a substitute for FTT where genuine dispute remains.

    Stage 2 — FTT notice of appeal (Form T240)

    Form T240 (Notice of appeal to Tax Chamber of First-tier Tribunal) is the standard notice. Sections: appellant details; representative (if any); HMRC decision details (date, reference, type); statement of grounds (why the decision is wrong + supporting facts + statutory authorities); requested case category (taxpayer can request basic to manage costs/complexity); whether oral hearing requested. Submit by post or via the GOV.UK online appeal portal. Filing fee: NONE (FTT Tax Chamber is fee-free). Time limit: 30 days from original decision OR 30 days from review conclusion notice. Late appeal: file Form T240 + separately request permission for late appeal under Rule 20(4) citing Martland framework.

    Case categories under Rule 23 SI 2009/273

    DEFAULT PAPER: fixed-penalty appeals + simple decisions — decided on papers without oral hearing; no costs (Rule 10); fastest disposal (typically 3-6 months). BASIC: simple oral hearing at regional FTT venue; appellant + HMRC representative; no costs (Rule 10) unless unreasonable conduct; typically 6-12 months. STANDARD: full procedure with directions, witnesses, evidence — wider scope; no costs unless unreasonable conduct (Rule 10(1)(b)). COMPLEX: full procedure with costs as default — but taxpayer can opt OUT of costs regime within 28 days of allocation (Rule 10(1)(c)(ii)); this is the lever that makes substantive disputes accessible to taxpayers without unaffordable costs exposure if they lose. FTT (not the taxpayer) makes the allocation but typically follows the parties' joint request where reasonable.

    Late appeal — Martland v HMRC framework

    Martland v HMRC [2018] UKUT 178 (TCC) is the lodestar — adopting the Denton v TH White [2014] EWCA Civ 906 three-stage civil-procedure analysis for tax tribunal late appeals. STAGE 1: identify the seriousness and significance of the failure to comply with the time limit. STAGE 2: consider why the default occurred. STAGE 3: evaluate all the circumstances — including the merits of the appeal, prejudice to HMRC, general interest in finality, and the importance of compliance with time limits. The FTT applies stages 1-3 sequentially; if delay is trivial, application usually granted; if substantial, taxpayer must show compelling explanation + arguable merits. Earlier Data Select Ltd v HMRC [2012] UKUT 187 (TCC) framework is superseded by Martland. Tax-tribunal late-appeal applications are NOT generous — typical denial rate is high for delays measured in months without strong explanation. File the late appeal + permission application together; do not delay further.

    Costs regime — Rule 10 SI 2009/273

    Default Paper + Basic: NO costs orderable except for 'unreasonable conduct' (Rule 10(1)(b)) — a high bar. Standard: same — no costs except unreasonable conduct. Complex: costs awarded as a matter of course UNLESS the taxpayer opts out within 28 days of allocation under Rule 10(1)(c)(ii); HMRC is then also free of costs exposure. This is the central mechanism that allows individual taxpayers to bring substantive disputes (e.g. R&D claim defences, transfer pricing, IR35) to FTT without bankruptcy risk if they lose. Specialist counsel can be engaged at standard chambers rates without the additional layer of adverse-costs exposure.

    ADR — Alternative Dispute Resolution

    HMRC offers ADR mediation as a parallel track to the appeal route. Mediator is an HMRC officer trained in mediation but with no decision-making authority on the underlying dispute. Useful for fact-disputed cases where both sides have entrenched. Free to taxpayer. Application via published HMRC online process. Acceptance discretionary. Does not pause the FTT appeal timetable unless agreed. ADR success rate is meaningful for fact-led disputes; less so for pure-law disputes where statutory construction is the issue.

    Who this applies to + key conditions

    Statute + manual references

    Primary: TMA 1970 s.49A-49I (statutory review framework); TMA 1970 s.31 (right of appeal); Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 SI 2009/273 (especially Rule 10 costs, Rule 20 appeal procedure, Rule 23 case categories); Tribunals, Courts and Enforcement Act 2007 (constitutional framework for FTT).

    Related: TCEA 2007 s.9 (statutory review framework in unified Tribunals system); Rule 8 SI 2009/273 (FTT's case-management striking-out powers); Rule 17 SI 2009/273 (withdrawal of appeal); Rule 35 SI 2009/273 (decisions + reasons); Rule 39 SI 2009/273 (permission to appeal to Upper Tribunal); TMA 1970 s.55 (postponement of disputed tax pending appeal); VATA 1994 s.83 (VAT appeal jurisdiction); s.83G (VAT statutory review framework)

    HMRC manual: ARTG2000 (Appeals, Reviews and Tribunals Guidance); ARTG8000 (Statutory Review process); ARTG8400 (Appeal to FTT)

    Case law: Martland v HMRC [2018] UKUT 178 (TCC) — late appeal lodestar applying Denton v TH White; Denton v TH White Ltd [2014] EWCA Civ 906 — three-stage relief-from-sanctions framework; Tinkler v HMRC [2021] UKSC 39 — service of notice procedural authority; Data Select Ltd v HMRC [2012] UKUT 187 (TCC) — earlier late-appeal framework superseded by Martland; Pendragon plc v HMRC [2015] UKSC 37 — abuse of law / VAT scheme; appeal jurisdiction; BPP Holdings v HMRC [2017] UKSC 55 — application of CPR overriding objective in tax tribunals

    Common mistakes + traps

    Worked example

    Maya, sole director of Maya Ltd (small UK consultancy), received a £4,800 Sch 24 inaccuracy penalty after HMRC enquiry assessed her 2023/24 expenses claims as 'careless' (30% band on £16,000 PLR)

    HMRC issued the penalty on 1 April 2026. Maya believes the expense categorisation issues were genuine ambiguity (not careless) + she fully cooperated unprompted disclosure with the enquiry team. She wants to appeal. She has contemporaneous emails with her accountant + a record of the disclosure she made in week 1 of the enquiry.

    1. Step 1 — 30-day window from 1 April 2026 → 1 May 2026 to request statutory review OR notify FTT appeal directly.
    2. Step 2 — Maya writes to HMRC by 1 May 2026 requesting statutory review under TMA 1970 s.49A. Grounds: (a) behaviour was innocent error not careless — contemporaneous accountant emails evidence reasonable care; (b) even if careless, disclosure was unprompted (Maya raised the issues in week 1) so band should be 0%-15% not 15%-30%; (c) full disclosure quality multiplier applies under Sch 24 para 9-10.
    3. Step 3 — HMRC review officer (different person) considers within 45 days. Outcome (illustrative): partially upholds — accepts disclosure was unprompted so reduces from 30% to 15% on the £16,000 PLR = £2,400. Maya still considers behaviour was innocent (0% — no penalty at all).
    4. Step 4 — Maya has 30 days from review conclusion notice to notify FTT appeal under TMA 1970 s.49G. Submits Form T240 with statement of grounds focused on behaviour-band dispute. Requests Basic category (single oral hearing, no costs risk).
    5. Step 5 — FTT allocates Basic. Hearing 6 months later at regional Tax Chamber venue. Maya self-represents. HMRC officer attends. Maya presents contemporaneous accountant emails; HMRC argues careless because expense categorisation guidance was clear. FTT (single judge) applies Auxilium Project Management v HMRC [2016] UKFTT 249 framework.
    6. Step 6 — Decision (illustrative): FTT finds behaviour innocent (genuine ambiguity, reasonable reliance on professional advice). Penalty cancelled in full. No costs ordered (Basic category).
    7. Step 7 — Anti-charlatan comparison: cold-call 'penalty appeal specialist' £3,000-8,000 retainer + 30% contingent on saved penalty — for Maya's £4,800 dispute the total professional fee would consume most of the saving. Self-serve via statutory review + Basic-category FTT cost Maya 8 hours of time + travel + £0 of fees.

    Outcome: Penalty cancelled at FTT — full saving £4,800. Self-serve route used statutory review filter (reduced penalty to £2,400) then Basic-category FTT for full cancellation. Total cost: Maya's time + travel to hearing venue. Specialist firm engagement would have been disproportionate. Where penalty quantum exceeds ~£50k-£100k OR substantive law dispute is involved, specialist counsel via tax chambers via direct access (or instructed accountant referral) at standard chambers rate becomes proportionate — typically much lower hourly rate than firm 'penalty specialist' markup.

    How this connects to the rest of the framework

    Penalty regime + reasonable excuse →

    Statutory review + FTT is the appeal route for penalty notices issued under Sch 24/55/56. Reasonable excuse appeals typically Default Paper or Basic category.

    Enquiry types + time limits →

    Closure notices ending s.9A enquiries + discovery assessments are appealable via statutory review + FTT.

    COP9 + CDF →

    COP9 decisions to refuse CDF or terminate CDF are separately appealable; specialist counsel essential — not the standard self-serve route.

    Scenarios + anti-charlatan →

    Scenarios 1, 2, 11, 12 work through specific statutory review + FTT examples including Martland late-appeal applications.

    /self-assessment →

    Self Assessment penalty + closure notice + discovery routes all feed into the procedure described here.

    Frequently asked questions

    What happens if I miss the Self Assessment deadline?+
    The Self Assessment deadline is 31 January (online filing) for the previous tax year. Miss it and HMRC apply an automatic £100 penalty. Beyond that: £10 per day from 3 months late (capped at £900), 5% of tax due at 6 months late, and another 5% at 12 months late, under Schedule 55 of the Taxes Management Act 1970. If you have a genuine reason (serious illness, bereavement, technical issue with HMRC's systems) you can appeal with evidence; HMRC accepts reasonable excuse appeals in most genuine cases.
    Do I need an accountant or can I file Self Assessment myself?+
    Legally you can file Self Assessment yourself via gov.uk for free, most simple sole-trader returns (single income source, basic expenses) are realistic to self-file. An accountant adds real value when: your trading profit is above £40,000 (extraction-strategy decisions matter), you have multiple income streams (PAYE + self-employment + property + dividends), you've crossed the £90,000 VAT threshold, you're considering incorporation, or you have an HMRC enquiry. Expect to pay £400-£1,500/year for a typical sole-trader accountant; the cost is itself a deductible expense.
    How do payments on account work?+
    When your Self Assessment tax bill exceeds £1,000 for the first time, HMRC requires payments on account toward NEXT year's tax. Half the current bill is due 31 January (alongside the current bill); the other half is due 31 July. So your first January after crossing the threshold can hit with a double-bill: last year's balance + first payment on account. Adjust via Form SA303 if you expect next year's income to drop substantially. Payments on account don't apply if more than 80% of your tax is collected via PAYE.
    Do I have to request statutory review before appealing to FTT?+
    No. You can appeal directly to FTT under s.49D within 30 days of the original HMRC decision. Statutory review is optional, free, and pauses the appeal clock. Some taxpayers use it as a filter on clear-cut decisions; others skip it for fact-disputed cases where the same HMRC department is likely to reach the same conclusion.
    What happens to the tax I owe while the appeal is pending?+
    Apply for postponement under TMA 1970 s.55 in your appeal — disputed tax is held over pending FTT decision (no late-payment interest accrues on postponed amount if appeal succeeds; if appeal fails, interest accrues from original due date). Without postponement, HMRC can pursue collection of disputed tax during appeal. Postponement is routinely granted.
    Can I get costs from HMRC if I win?+
    Generally no in Basic/Default Paper/Standard categories — Rule 10 only allows costs for 'unreasonable conduct' (a high bar). In Complex category costs are awarded as a matter of course unless taxpayer opts out within 28 days. The trade-off: opt out of costs and you can't recover from HMRC if you win, but you also have no adverse-costs risk if you lose. For most individual taxpayers, opting out is the right call.
    Is the FTT decision final or can I appeal further?+
    Permission to appeal to the Upper Tribunal (Tax and Chancery Chamber) is required, on points of law only (not findings of fact). Apply within 28 days under Rule 39 SI 2009/273. From UT to Court of Appeal then Supreme Court on points of law. The vast majority of FTT decisions are final at FTT level.

    Free + regulated-body resources

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