Enforcement of judgements in litigation

March 17th 2010

With effect from 1 April 2010 HMRC will collect any tax due whenever it wins at the Tribunal or the Courts even if there is an appeal to a higher Tribunal or Court.

The Chancellor announced in his Pre-Budget Report 2009 that HMRC is to apply a more consistent approach to the collection of debts in litigation.

At present, HMRC must repay overpaid tax where there is a judgment in favour of a taxpayer, even though that judgment is subject to appeal. However where HMRC receives a judgment in its favour they do not consistently collect the tax before the appeal is heard.

HMRC has therefore decided to move to a more consistent approach, under which payment of tax will normally be required in all such cases. This change will take effect in relation to all decisions made by the Tribunals or Courts on or after 1 April 2010.

A party to litigation is legally bound to accept the judgment of a tribunal or court, even though they may be appealing against it.

HMRC will not enforce payment in cases where an agreement not to do so had been made with the appellant before 9 December 2009 (the date of the Pre-Budget Report)

Further information can be seen via the following link:

http://www.hmrc.gov.uk/complaints-appeals/tax-under-appeal.htm