HM Customs & Revenue’s “call centre culture” could threaten the success of the new tribunal system, business advisers Horwath Clark Whitehill have claimed.
The new tribunals, which follow recommendations by Sir Andrew Leggett, are also intended to be independent of government. They cover both tax and non-tax issues – the latter include the likes of rent tribunals and social security appeals.
The new regime is a two-tier structure involving appeals from first tier to upper tier on points of law and with permission of the first tier. Complex issues can go straight to the upper level.
Denis Holly, VAT director at Horwath Clark’s Midlands office, said: “It is all going to take a while to settle down.
“The first tier is not a court of record and decisions are not binding on other cases; the upper tier though will set precedence rather in the manner of the old direct tax Special Commissioners.”
All administration has been centralised in Birmingham.
VAT tribunals (indirect tax) and General and Special Commissioners (direct taxes) are both replaced.
Mr Holly went on: “For VAT the number of tribunal centres increases from less then five to more than 100 in line with the old direct tax system, so people will get a more local service.
“But it may prevent smaller cases as no costs are awarded unless the issues are complex.
“There are four new approaches at first tier level – written, basic, standard and complex. Written procedures avoid attendance at the meeting but may discourage those tax payers who just like to turn up and talk.”
An optional pre-case review procedure has been introduced intended to avoid the expense and worry of going to a tribunal.
But Mr Holly added: “It involves an ‘independent’ review within HMRC where another pair of eyes considers the dispute. However, there are doubts about this independence especially where indirect tax is concerned – direct tax reviews are considered to be more credible.
“And questions remain whether HMRC have the necessary skilled and experienced reviewers as a consequence of the reduction of staff and move to a call centre culture.”
Meanwhile, HMRC has introduced four changes for businesses which are partly exempt from VAT. Financial services, insurance, care and welfare, health, cultural services and charities are all affected.