When the First tier Tribunal (Tax Chamber) receives an appeal it must allocate it to one of four categories: Default Paper, Basic, Standard or Complex. The category decides whether there will be a hearing, how much paperwork is exchanged beforehand and, for Complex cases only, whether the loser can be ordered to pay the other side’s costs.

How does the tribunal choose a category?

Rule 23 of the Tribunal Procedure (First tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273) requires the tribunal, on receiving a notice of appeal, to give a direction allocating the case to a category. Rule 23(2) describes them:

  • Default Paper cases, which will usually be disposed of without a hearing;
  • Basic cases, usually disposed of after a hearing with minimal exchange of documents beforehand;
  • Standard cases, usually subject to more detailed case management and disposed of after a hearing; and
  • Complex cases.

HMRC’s Appeals, Reviews and Tribunals Guidance at ARTG8350 says allocation follows a tribunal practice direction listing the types of case in each category. The HM Courts and Tribunals Service guide T242 adds that the category depends on the complexity of the appeal and the amount in dispute. The allocation arrives in the tribunal’s acknowledgement, after the notice of appeal has been accepted.

Which cases are Default Paper and what happens?

ARTG8350 lists appeals against fixed filing penalties for Self Assessment and Company Tax Returns, employer end of year late return penalties, Construction Industry Scheme late return penalties, Class 2 National Insurance late notification penalties and income tax surcharges.

The timetable is set by the rules:

  1. HMRC sends a statement of case to the tribunal and the appellant within 42 days after the tribunal sent it the notice of appeal (rule 25(1)(a)). The statement must give the legislative provision under which the decision was made and set out HMRC’s position (rule 25(2)).
  2. The appellant may send a written reply within 30 days after HMRC sent the statement of case (rule 26(2)). It can respond to HMRC, add further information and documents, and ask for a hearing.
  3. The tribunal then decides the case without a hearing, unless any party has asked in writing for one, in which case it must hold a hearing (rule 26(6) and (7)).

Which cases are Basic and what happens?

ARTG8350 lists appeals against late filing and late payment penalties (including daily penalties), most inaccuracy penalties under paragraph 15 of Schedule 24 to the Finance Act 2007, indirect tax penalties appealed on reasonable excuse grounds, Construction Industry Scheme gross payment status decisions and information notices. It also lists applications for permission to make a late appeal, postponement of tax pending appeal and a direction that HMRC close an enquiry. Inaccuracy penalty appeals are excluded from Basic where the penalty is for deliberate behaviour, where the tax assessment is also under appeal, or where the case is about indirect tax.

Rule 24 says HMRC’s formal statement of case under rule 25 is not required and, subject to directions, the case goes straight to a hearing. If HMRC intends to raise grounds it has not already given the appellant, it must notify them as soon as reasonably practicable and in enough detail for the appellant to respond. In practice, T242 says the other party has 42 days to send a statement of reasons and an electronic bundle, after which the appellant has 14 days to respond. Basic appeals are usually heard by video.

What happens in a Standard case?

Standard is the default for anything not placed in another category. Because appeals against the tax itself, such as a closure notice or discovery assessment, are not on the Default Paper or Basic lists, they will usually be Standard unless allocated as Complex. The steps are fuller:

  1. HMRC sends a statement of case within 60 days after the tribunal sent the notice of appeal (rule 25(1)(c)).
  2. Within 42 days after that, each party sends the tribunal and the other side a list of the documents it holds and intends to rely on, and must allow the other to inspect or copy them (rule 27).
  3. The tribunal issues further directions. T242 says these normally require exchanging documents, preparing and exchanging witness statements, giving availability for the hearing and providing a skeleton argument. One party is directed to prepare the electronic hearing bundle.

ARTG8360 says the tribunal asks the parties for dates to avoid before fixing a hearing in Standard and Complex cases.

When is a case Complex and what changes?

Under rule 23(4) the tribunal may allocate a case as Complex only if it considers that the case will require lengthy or complex evidence or a lengthy hearing, involves a complex or important principle or issue, or involves a large financial sum. The procedural steps are the same as for Standard cases. Two extra consequences follow under rule 23(5):

  • Costs. The tribunal can award costs under rule 10(1)(c) unless the taxpayer sends a written request within 28 days of receiving notice of the allocation asking for the proceedings to be excluded from that costs liability. Our page on costs in tax tribunal appeals weighs up that election.
  • Transfer. Under rule 28, with the consent of the parties, the case or a preliminary issue can be referred for transfer to the Upper Tribunal, which needs the agreement of the Presidents of both chambers.

Can you change the category or avoid a hearing?

Yes. Rule 23(3) lets the tribunal reallocate a case at any time, either on the application of a party or on its own initiative. ARTG8350 confirms that either side can apply. An appellant might ask to move a penalty appeal from Basic to Standard if it turns on detailed facts and witness evidence, or HMRC might seek Complex status for a large or novel dispute.

On hearings, rule 29 says the tribunal must hold a hearing before deciding a case unless each party has consented to a decision without one and the tribunal considers it can decide the matter that way. Default Paper cases are the exception under rule 26. ARTG8350 says that in Basic, Standard and Complex cases either party may ask for a paper decision, but the tribunal has the final say.

What does the hearing look like?

The gov.uk guidance says hearings may be by phone, by video or in person, and that you will usually get at least 14 days’ notice of the date. T242 explains that the panel is usually a judge and a professionally qualified member, sometimes a judge alone. The main venues are London, Birmingham, Manchester and Edinburgh. Hearings are normally public. Outside Complex cases, costs can be ordered only for wasted costs or where a party or its representative has acted unreasonably (rule 10(1)(a) and (b)).

How might allocation play out?

Illustration only. Three appeals reach the tribunal on the same day:

  • A fixed Self Assessment late filing penalty is allocated as Default Paper. HMRC sends its statement of case, the appellant replies within 30 days, and a judge decides on the papers.
  • A careless inaccuracy penalty, where the appellant accepts the tax but argues reasonable care, is Basic. It goes to a short video hearing.
  • A dispute over whether a £2 million receipt is capital or income, with several witnesses, is allocated as Complex. The appellant has 28 days from notice of the allocation to decide whether to opt out of the costs regime.

What mistakes do appellants make?

  • Not replying in a Default Paper case. The 30 day reply is the only chance to answer HMRC’s statement of case before the judge decides.
  • Forgetting to ask for a hearing in writing when one is wanted in a Default Paper case.
  • Missing the 28 day costs election in a Complex case.
  • Assuming a Basic case needs no preparation. Evidence still has to be ready for the hearing.
  • Leaving a case in an unsuitable category instead of applying for reallocation under rule 23(3).

For what comes before the tribunal, see HMRC statutory review and the tax tribunal.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.