HMRC Review or Tribunal: How to Challenge a Tax Decision

If HMRC has made a decision you disagree with, you have two main routes: ask HMRC to look at it again through an internal review, or appeal to the First-tier Tribunal (Tax Chamber), which is independent of HMRC. For direct tax such as income tax, you must appeal to HMRC first before the tribunal will hear your case, and payment of the tax in dispute is usually postponed until the appeal is decided¹. For indirect tax such as VAT or customs duties, you must either pay or deposit the tax in dispute, or make a hardship application to HMRC, before submitting the appeal¹.

The deadlines matter more than most people expect. A late appeal can still be accepted if it reaches the tribunal within 13 months of the notice, provided HMRC do not object or the tribunal finds it unjust not to accept it¹. After 13 months, the tribunal cannot accept it even with good reason¹.

This page covers what a Self Assessment taxpayer can challenge, how to challenge a notice to file, what happens when HMRC cancels a return, how Simple Assessment fits in, the time limits on HMRC enquiries, the penalties that are changing, and what to do when you stop self-employment or leave the UK.

What HMRC decisions a Self Assessment taxpayer can challenge

The range of decisions that can be challenged is wider than most people realise. A penalty can be appealed if there is a reasonable excuse⁷. An HMRC determination can be appealed to the First-tier Tax Tribunal². If HMRC has corrected a return through a revenue correction notice, that correction can be rejected in writing⁸. If HMRC has made a mistake in a tax calculation, the route is to object in writing and ask for a correction; there is no formal appeal process for a calculation mistake, but if HMRC does not correct it within a reasonable period, a complaint can be made⁹.

For tax credit overpayments, you can ask HMRC to review by calling 0345 300 3900 or completing and returning form TC846, normally within three months of the decision¹⁰. For Carer's Allowance decisions, the route is mandatory reconsideration followed by an appeal to an independent tribunal¹¹. For Child Benefit and Guardian's Allowance, the tribunal is completely separate from the HMRC Child Benefit Office¹².

The key distinction is between a review and an appeal. A review is HMRC looking at its own decision again. An appeal goes to the tribunal, which is independent. For direct tax, you must go through HMRC first. For indirect tax, the payment or hardship condition applies before you can appeal¹.

Challenging a notice to file a tax return

If HMRC sends you a notice to file a tax return, you must submit it by the due date unless HMRC withdraws the return, even if there is no income to report, and penalties for failing to file by the due date still apply⁴. The filing deadline for online returns is 31 January following the end of the tax year¹³. For paper returns, the deadline is 31 October⁵.

If a notice to file is believed to be wrong, HMRC can be contacted and asked to withdraw it. People who no longer need to complete a tax return should notify HMRC as soon as possible¹⁴. But until HMRC actually withdraws the return, the obligation stands.

There is a separate issue with HMRC's own corrections. If your tax return contains an obvious error or is missing information, HMRC will correct the return and send a notice explaining why⁸. If you disagree, you can reject the correction. If HMRC agrees with your rejection, they will remove the correction; if not, they may carry out further checks⁸.

When a filing requirement is cancelled, penalties should be too

If HMRC withdraws a notice to file, the filing requirement disappears. But penalties already charged for failing to file by the due date do not automatically disappear with it. You can appeal against a penalty if you have a reasonable excuse⁷. The tribunal's approach to late appeals applies: if you appeal after the deadline but within 13 months of being sent the notice, your appeal may still be treated as being in time if HMRC do not object or the tribunal finds it unjust not to accept it¹.

If a change to your return means you need to pay less tax, HMRC will process a repayment on request⁹. If HMRC has charged a penalty and you believe it should be cancelled because the underlying filing requirement was withdrawn, you would need to make that case to HMRC directly, and if unsatisfied, appeal to the tribunal.

For tax credit overpayments, HMRC expect the dispute to be started within three months of the decision, whether that is the notification of the overpayment, the outcome of the mandatory reconsideration, or an appeal decision¹⁶.

A Simple Assessment instead of a tax return

Simple Assessment is not the same as making a Self Assessment tax return¹⁷. It is a way for HMRC to collect tax from people who do not complete a Self Assessment tax return and where it is not possible to collect the right amount of tax through PAYE⁴. HMRC sends you a Simple Assessment tax bill, also known as a PA302, if you did not pay enough tax and they could not collect it through your tax code¹⁷.

You cannot request a Simple Assessment. HMRC decide if you are eligible on an annual basis depending on your income and tax liability⁴. Under Simple Assessment you do not have to fill in any forms, but you do need to let HMRC know if they have not included all your income in their calculation⁴.

If you are registered for Self Assessment and receive a Simple Assessment letter, you need to call HMRC on 0300 200 3300 to have the Simple Assessment withdrawn⁴. If you pay too much, you will need to contact HMRC for a refund¹⁷.

The State Pension is a common trigger. If HMRC is unable to collect the tax due through your tax code, they may send you a Simple Assessment tax calculation after the end of the tax year¹². In a worked example, HMRC sends a Simple Assessment after the end of the tax year to collect £236 remaining tax due from a taxpayer with £16,000 State Pension and £1,500 private pension income¹⁷.

HMRC enquiries: normally up to 12 months after you file

An officer from HMRC can start an enquiry into any return within 12 months of the date it was submitted². If the return was submitted late, HMRC can start an enquiry within 15 months instead of 12³. The clock runs from submission, not from the filing deadline, and it applies to amended returns too.

If HMRC starts an enquiry, you must keep your records until the enquiry is finished¹⁸. HMRC can go back six years if they think the error was due to lack of reasonable care, or 20 years in the case of suspected fraud or if you have never submitted a tax return¹⁸.

During a compliance check, HMRC may charge a penalty if something wrong is found, and cooperation is considered when deciding if a penalty can be reduced². If you get an information notice, you must give HMRC what they have asked for, or they may charge you a penalty². If you have underpaid tax, you must repay it, HMRC will charge interest and may charge a penalty, and may issue a tax assessment or amend your tax return².

If HMRC finds you have deliberately sent inaccurate returns or other documents, you could be charged a higher penalty or be taken to court¹⁹.

Late filing and late payment penalties: what is changing

The penalty system is being overhauled. From April 2026, the standard £100 late-filing fee will be replaced for MTD users⁶. From April 2027, people who are not yet required to use MTD will also move to the new penalty system⁶. This means the new rules will apply to your 2027-28 tax return, with the earliest possible penalty point being issued in February 2029⁶.

Under the current system, HMRC could automatically charge you £100 if your return is up to 3 months late⁵. At least 6 months late, the penalty is £300 or 5% of the income tax due, whichever is higher¹³. After 12 months, an additional £300 fine, or 5% of the tax due if higher, applies⁵. For late payment, after 12 months (31 January the following year), an additional 5% applies⁵.

Under the points-based system, the threshold is 4 points for quarterly submission frequency, including MTD for ITSA²⁰. If you change reporting frequency, your points total adjusts: moving from annual to quarterly adds 2 points, monthly to quarterly subtracts 1 point, and monthly to annual subtracts 3 points²⁰. HMRC will have 12 months from the date of the Tribunal decision to levy a point or financial penalty after cancellation by Tribunal²⁰.

Any tax returns from earlier years, such as 2025-26 or 2026-27, will still follow the old penalty rules, even if you file them late after the new system has started⁶.

Stopping self-employment or leaving the UK: closing your record

If you stop being self-employed or leave the UK, you need to tell HMRC. You must tell HMRC if you are leaving the UK to live abroad permanently or you are going to work abroad full-time for at least one full tax year²². You need to tell HMRC that you are moving or retiring abroad to make sure you pay the right amount of tax²³.

If you are a UK resident returning from abroad, you may need to register for Self Assessment, for example if you start working for yourself or have other income or gains from the UK or abroad. Employees with no other untaxed income need not register²⁴.

If you are non-resident and have UK income, you cannot use HMRC's online services to tell them about your income²⁴. You do not need to report your income to HMRC if you have already claimed tax relief under a double-taxation agreement²⁴. To claim a refund of overpaid tax, send form R43 to HMRC, or claim the refund in your Self Assessment tax return if you are already doing one²⁴.

If you have claimed tax relief on employee expenses, HMRC process repayment claims without investigating them, but they may check the claim in detail later. If they think your claim was unjustified, the relief must be returned and interest may be charged¹⁵.

Where to get help

If you are struggling with an HMRC decision or penalty, contact HMRC as soon as possible if you have missed a tax deadline or know you will not be able to pay a tax bill on time²⁵. For free, impartial advice, TaxAid provides guidance on tax enquiries and problems with returns². Tax Help for Older People and Citizens Advice also offer support. If you cannot afford to pay your tax bill, you may be able to set up an online payment plan if you owe less than £30,000 and are within 60 days of the payment deadline²⁶. If information is missing or inaccurate, HMRC can cancel the plan²⁶.

For complaints about HMRC, you can escalate to the Adjudicator's Office if HMRC does not resolve your complaint. For tax credit overpayments, you can contact HMRC to dispute the overpayment, and if unsatisfied, appeal to the First-tier Tribunal¹².