Tax tribunals backlog hits new high

The backlog of tax disputes waiting to be heard has reached a record high, new research has found.

Law firm Pinsent Masons said on 25 November that 27,246 cases were waiting to be heard in the tax tribunals in the year ended 31 March 2014, up from 26,965 cases outstanding at 31 March 2013. The figure was more than double the 13,456 cases outstanding at 31 March 2010.

The 2013-14 cases outstanding included 267 lodged in the Upper Tribunal over the year, an increase of 32 per cent on the previous year. Five years ago, just 70 new cases were lodged with the tribunal.

The First-tier Tribunal (Tax) hears appeals against decisions relating to tax made by HM Revenue & Customs (HMRC) and the Upper Tribunal hears appeals against First-tier Tribunal cases.

James Bullock from Pinsent Masons said: “The tax tribunals have been getting through cases quicker but the backlog is still going up. The time taken for cases to be completed needs to come down substantially so that taxpayers are not left in financial limbo for what can be years. To achieve a more reasonable time frame for tax cases, HMRC needs to start negotiating deals.”

He added that the increased number of cases at the Upper Tribunal would be a particular concern for taxpayers to whom HMRC had issued an accelerated payment notice, requiring them to pay the disputed tax up front.

The notices can only be issued to those with an open enquiry or appeal who have taken part in tax avoidance schemes which were required to be notified to HMRC under the Disclosure of Tax Avoidance Scheme (DOTAS) rules.

Link: Schemes subject to accelerated payments