Appeal routes for direct and indirect taxes compared

Q: How does a direct tax dispute move forward?

Appeal to HMRC. Under section 31A you give written notice, with grounds, to the officer who issued the decision within 30 days after its issue date. See how to appeal within 30 days. Discussion. ARTG2010 describes the appeal as one appeal in two stages. In the first stage the decision maker tries to resolve it, and most disputes end here. Review or tribunal. Section 49A then allows three things: you can require a review (section 49B), HMRC can offer one (section 49C), or you can notify the appeal to the tribunal (section 49D). The tribunal cannot be used until you have appealed to HMRC. After a review. Section 49G gives 30 days from the review conclusion letter to notify the tribunal.

Q: How does an indirect tax dispute move forward?

Decision with review offer. Section 83A requires HMRC to offer a review at the same time as it notifies an appealable VAT decision. ARTG4230 says that for computer generated notices the offer sits in the accompanying notes. Accept or appeal. Section 83C requires HMRC to review if you accept within 30 days from the date of the document containing the offer. Alternatively section 83G lets you appeal to the tribunal within 30 days of the date of the decision document. After a review. Section 83G(3) bars a tribunal appeal until the conclusion date and then gives 30 days from it. Indirect taxes also have tools direct taxes lack. Under section 83D HMRC can extend the acceptance period by notice given within it, which ARTG3060 encourages where you have more information to send. Under section 83E HMRC must carry out a review requested late if you had a reasonable excuse and asked without unreasonable delay. Section 83B also lets a third party with a right of appeal require a review within 30 days of becoming aware of the decision.

Q: How do the two routes compare side by side?

PointDirect taxesVAT First stepWritten appeal to HMRC within 30 days (TMA s31A)Accept review or appeal to tribunal within 30 days (VATA ss83C, 83G) Who offers a reviewHMRC may offer one, or you may require one, after you appeal (ss49B, 49C)HMRC must offer one with the decision (s83A) Extending timeNo statutory extension; late appeals under s49HMRC may extend the acceptance period within it (s83D) Late review acceptanceHMRC guidance (ARTG4300): must accept with reasonable excuseStatutory (s83E) Doing nothing after a review offerHMRC's view treated as a settlement agreement (s49C(4))The matter is final (ARTG4230) Review deadline45 days or agreed period (s49E(6))45 days or agreed period (s83F(6)) Tribunal after review30 days from conclusion letter (s49G)30 days from conclusion date (s83G(3)) Paying the disputed taxDue unless postponed under s55Usually paid before tribunal hears appeal, unless hardship (s84(3) to (3B))

Q: How might both routes run in one case?

Illustration only. After a compliance check, a company receives a corporation tax closure notice and a VAT assessment on the same disputed payments. For corporation tax it writes to the officer within 30 days of the closure notice, gives its grounds and applies to postpone the tax. For VAT it reads the review offer in the assessment letter and, within 30 days, accepts it by writing to the address given. The two disputes now run on separate clocks. If the company later wants the tribunal for both, the VAT appeal will usually need the tax paid first or a hardship application, while the corporation tax can stay postponed.

For income tax, corporation tax and other direct taxes you appeal to HMRC first, in writing within 30 days, and only then choose between a statutory review and the tax tribunal. For VAT and most duties there is no appeal to HMRC: the decision letter offers a review, and within 30 days you either accept it or appeal straight to the tribunal. The deadlines look similar, but what happens if you do nothing, and whether you must pay first, differ.

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Which taxes follow which route?

GOV.UK groups the taxes as follows. Direct taxes include income tax (including PAYE), corporation tax, capital gains tax, National Insurance contributions and inheritance tax. Indirect taxes include VAT, excise duty, customs duty and environmental taxes such as Plastic Packaging Tax, Landfill Tax and the Climate Change Levy.

The statutory machinery is different. Direct tax appeals and reviews run through sections 31 to 31A and 49A to 49I of the Taxes Management Act 1970. VAT uses sections 83A to 83G of the Value Added Tax Act 1994, and many duties use the parallel sections 15A to 16 of the Finance Act 1994. One exception is worth knowing: ARTG3130 says an appeal against a Schedule 36 information notice always follows the direct tax procedure, even when the compliance check is about VAT.

How does a direct tax dispute move forward?

Appeal to HMRC. Under section 31A you give written notice, with grounds, to the officer who issued the decision within 30 days after its issue date. See how to appeal within 30 days.
Discussion. ARTG2010 describes the appeal as one appeal in two stages. In the first stage the decision maker tries to resolve it, and most disputes end here.
Review or tribunal. Section 49A then allows three things: you can require a review (section 49B), HMRC can offer one (section 49C), or you can notify the appeal to the tribunal (section 49D). The tribunal cannot be used until you have appealed to HMRC.
After a review. Section 49G gives 30 days from the review conclusion letter to notify the tribunal.

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How does an indirect tax dispute move forward?

Decision with review offer. Section 83A requires HMRC to offer a review at the same time as it notifies an appealable VAT decision. ARTG4230 says that for computer generated notices the offer sits in the accompanying notes.
Accept or appeal. Section 83C requires HMRC to review if you accept within 30 days from the date of the document containing the offer. Alternatively section 83G lets you appeal to the tribunal within 30 days of the date of the decision document.
After a review. Section 83G(3) bars a tribunal appeal until the conclusion date and then gives 30 days from it.

Indirect taxes also have tools direct taxes lack. Under section 83D HMRC can extend the acceptance period by notice given within it, which ARTG3060 encourages where you have more information to send. Under section 83E HMRC must carry out a review requested late if you had a reasonable excuse and asked without unreasonable delay. Section 83B also lets a third party with a right of appeal require a review within 30 days of becoming aware of the decision.

How do the two routes compare side by side?

Point	Direct taxes	VAT
First step	Written appeal to HMRC within 30 days (TMA s31A)	Accept review or appeal to tribunal within 30 days (VATA ss83C, 83G)
Who offers a review	HMRC may offer one, or you may require one, after you appeal (ss49B, 49C)	HMRC must offer one with the decision (s83A)
Extending time	No statutory extension; late appeals under s49	HMRC may extend the acceptance period within it (s83D)
Late review acceptance	HMRC guidance (ARTG4300): must accept with reasonable excuse	Statutory (s83E)
Doing nothing after a review offer	HMRC’s view treated as a settlement agreement (s49C(4))	The matter is final (ARTG4230)
Review deadline	45 days or agreed period (s49E(6))	45 days or agreed period (s83F(6))
Tribunal after review	30 days from conclusion letter (s49G)	30 days from conclusion date (s83G(3))
Paying the disputed tax	Due unless postponed under s55	Usually paid before tribunal hears appeal, unless hardship (s84(3) to (3B))

Why does doing nothing work out differently?

For direct taxes, the danger lies after you appeal. If HMRC offers a review and you neither accept it nor notify the tribunal within 30 days, section 49C(4) treats HMRC’s view as if it were a written agreement settling the appeal under section 54(1), and section 49C(5) removes the usual right to resile from it. The same deemed agreement follows a review conclusion you do not take to the tribunal (section 49F). Our guide to the view of the matter letter covers this step.

For VAT there is no deemed agreement, because there was never an appeal to HMRC. The decision simply becomes final once the time for a review or appeal passes; ARTG3110 says the matter may be considered closed, subject to late appeals and late review acceptances. The practical result is similar, but the way back is different: for VAT you ask HMRC under section 83E or ask the tribunal for permission under section 83G(6).

Do you have to pay the tax while you dispute it?

For direct taxes, section 55 makes the tax due as if there were no appeal unless you apply to postpone it, in writing within 30 days, stating the amount you believe is overcharged and why. See postponing tax pending appeal.

For indirect taxes, GOV.UK says HMRC will not collect disputed tax while a review is under way, but that you will usually have to pay before the tribunal will hear an appeal. Section 84(3) applies that rule to many VAT decisions, and section 84(3B) lets the appeal proceed if HMRC or the tribunal accepts that paying would cause hardship. See the VAT pay first rule.

How do duties fit in?

Many excise and customs decisions follow sections 15A to 15F of the Finance Act 1994, which mirror the VAT rules: HMRC must offer a review when it notifies the decision (section 15A), and section 16(1B) gives 30 days to appeal to the tribunal. ARTG3060 notes that some decisions under section 14 of that Act instead allow 45 days to require a review. For those older style reviews, an appeal against a deemed confirmation under section 15(2) can be made within 75 days beginning with the date the review was required (section 16(1A)). Always read the decision letter, which states the route that applies.

How might both routes run in one case?

Illustration only. After a compliance check, a company receives a corporation tax closure notice and a VAT assessment on the same disputed payments. For corporation tax it writes to the officer within 30 days of the closure notice, gives its grounds and applies to postpone the tax. For VAT it reads the review offer in the assessment letter and, within 30 days, accepts it by writing to the address given. The two disputes now run on separate clocks. If the company later wants the tribunal for both, the VAT appeal will usually need the tax paid first or a hardship application, while the corporation tax can stay postponed.

What mistakes come up most often?

Writing to the VAT officer to “appeal” and waiting. VAT has no appeal to HMRC; the letter must accept the review, or you must appeal to the tribunal.
Sending a direct tax appeal straight to the tribunal before appealing to HMRC.
Assuming an argumentative reply stops the VAT clock. Only a section 83D extension notice from HMRC does that.
Applying the VAT pay first rule to income tax, or forgetting the separate section 55 postponement application.
Missing that a Schedule 36 notice about VAT follows the direct tax route. See also statutory review and the tax tribunal.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.