HMRC rules allow payment delays on direct and indirect taxes during an appeal. Find out how to delay paying a tax bill or a tax penalty while you disagree the amount.
DIRECT TAXES: These types of tax include Capital Gains Tax, Corporation Tax, and Income Tax.
The first step is to appeal against a direct tax decision by HM Revenue and Customs. Follow that by writing to the same HMRC office that sent the decision. You should inform them:
Note: HMRC office will confirm in writing if they agree the calculation and payment date.
If the appeal gets made against a penalty it does not need to get paid until after any appeals get settled.
The process is a little different for HMRC to review an indirect tax decision. These would include Insurance Premium Tax or Value Added Tax. In these case there is no need to pay until after the review gets completed.
But, in most cases, an appeal to the tax tribunal means you have to pay the tax before they will hear the appeal. The rules allow you to request delay paying the tax.
A valid reason for delaying a payment could be in cases of extreme financial difficulty. Examples might include business liquidation or bankruptcy. But, you must pay any money owed and in full (including any interest) after a final decision gets made.
The process is similar after asking for a review or appealing to the tribunal about a tax penalty. In both cases HMRC will not need a payment until the appeal gets settled.
Note: What if you still disagree with the outcome? In this case you can make a request for the decision to get reviewed.
You may need a 'reasonable excuse' to appeal against a tax penalty handed out by HMRC.
Having reasonable excuses might be justification for sending late returns or payments.
As a rule, HMRC define a reasonable excuse as "something that stopped you meeting a tax obligation that you took reasonable care to meet". Examples of what may count as reasonable excuses include:
Note: Once the reasonable excuse gets resolved you must send the return or payment without any delay.
As a rule, these excuses will not count to delay payments while appealing against a tax decision:
How to Delay Payment while Appealing Tax Appeal in the United Kingdom