HMRC's Internal Review: What It Is and Whether To Request One

You've received an appealable HMRC decision. Maybe it's a penalty, maybe it's an assessment you disagree with. You know you can appeal to the tax tribunal—but there's a quicker, free step you can take first.

It's called a statutory review. And in more than half of cases, it changes the outcome.

What Is a Statutory Review?

A statutory review is a fresh look at HMRC's decision by a different officer. The reviewing officer works in HMRC's Solicitor's Office and Legal Services (SOLS)—outside the chain of command of whoever made the original decision.

The reviewer examines your case independently and reaches one of three conclusions:

• Upheld — the original decision stands
• Varied — the decision is changed (typically in the taxpayer's favour, though the legislation does not prevent an upward variation—if you're concerned about this, ask the reviewing officer to confirm the scope of the review before it begins)
• Cancelled — the decision is withdrawn entirely

This is set out in section 49E(5) of the Taxes Management Act 1970 for direct taxes and section 83F(5) of the VAT Act 1994 for indirect taxes.

The Numbers

According to figures shared by HMRC's National Reviews Team (2019-20):

• Around 56% of reviewed decisions were cancelled or varied—meaning the original decision changed in the taxpayer's favour
• For VAT penalty cases involving reasonable excuse, that figure was around 81%
• Around 75% of disputes that went through the review process settled without ever reaching a tribunal

A review costs nothing and doesn't prevent you from going to tribunal afterwards. Given those numbers, it's almost always worth requesting one.

Note that while the review is underway, interest continues to accrue on any unpaid tax from its original due date. If you're appealing a tax assessment (rather than a penalty), you may want to apply to postpone payment—see the payment and postponement section of our step-by-step appeal guide.

How It Works: Direct Taxes vs Indirect Taxes

The review process works differently depending on the type of tax involved.

The key difference: for indirect taxes, HMRC is required by law to offer you a review at the same time as the decision (section 83A VATA 1994). For direct taxes, the review comes later—after you've appealed to HMRC and the dispute hasn't been resolved informally.

The 30-Day Trap

This is the single most important thing to know about the review process.

For direct taxes, if HMRC offers you a review and you don't respond within 30 days, your appeal is treated as settled in HMRC's favour. Not paused. Not waiting for your reply. Settled.

The law is blunt. Section 49C(4) TMA 1970 says that if you don't accept the review offer within the acceptance period, HMRC's view "is to be treated as if it were contained in an agreement in writing" to settle the matter. And under section 49C(5), you cannot undo that deemed agreement.

In practice, this means a letter you ignore or miss could end your dispute permanently. If HMRC has offered you a review, you must respond—even if only to decline the review and notify your appeal to the tribunal instead.

How To Request a Review

There's no special form. Your HMRC decision letter will include an address for responses—use that. If you can't find it, you can write to HMRC's Solicitor's Office and Legal Services:

• Post: HMRC, Solicitor's Office and Legal Services, BX9 1ZT

Your request should include:

1. Your name and tax reference number (UTR, VAT number, or NINO)
2. The decision you're asking to be reviewed (include the date and reference from the letter)
3. Why you disagree with the decision
4. Any supporting documents or evidence

Keep it factual and organised. The reviewing officer will be reading your case fresh—make it easy for them to understand your position.

The 45 days Clock

Once HMRC accepts your review request, they have 45 days to complete the review and notify you of their conclusions (section 49E(6) TMA 1970).

If HMRC doesn't complete the review within 45 days, the decision is treated as upheld. You then have 30 days from when the 45 days expired to appeal to the tribunal.

HMRC can extend the 45 days deadline—but the legislation says only for "such other period as may be agreed" (section 49E(6)(b)). An extension requires your agreement. HMRC cannot unilaterally give themselves more time.

After the Review

What happens next depends on the outcome:

Cancelled — the decision is withdrawn. You've won. There's nothing more to do.

Varied — the decision has been changed. If the new decision is acceptable, the dispute ends. If you still disagree, you have 30 days to appeal the varied decision to the tribunal.

Upheld — HMRC's original decision stands. You have 30 days from the date of the review conclusion letter to appeal to the First-tier Tribunal (Tax Chamber) (section 49G(5)(a) TMA 1970).

If you appeal to the tribunal after a review, the tribunal "is to determine the matter in question" itself (section 49G(4))—a fresh hearing on the merits, not a review of HMRC's review. The tribunal is not bound by the review officer's reasoning.

When Reviews Go Wrong: A Case Example

Reviews don't always get the law right. In HMD Response International v HMRC [2011] UKFTT 472 (TC), HMRC's review decision rejected an appeal against a £500 late filing penalty by applying the wrong legal test.

HMRC required the appellant to show "exceptional circumstances" to excuse the late filing. But that's not what the law says—the statutory test is "reasonable excuse," a lower threshold. The tribunal found that HMRC had "quite wrongly sought to elevate" the test to something more onerous than Parliament intended.

The tribunal allowed the appeal in full. The penalty was set aside.

This case illustrates two things. First, review officers can make errors of law—and the tribunal will correct them. Second, even if your review is unsuccessful, it doesn't mean your case is weak. The tribunal takes a completely fresh look.

Review vs Straight to Tribunal

Should you request a review or go directly to the tribunal?

For most people, requesting a review first makes sense. It's free, relatively quick, and more than half the time it changes the outcome. If the review doesn't go your way, you still have the full right to go to the tribunal.

The main exception is where the 30-day appeal deadline is tight and you're worried about timing. In that case, you can go straight to the tribunal—or request a review and notify the tribunal at the same time, asking the tribunal to hold the appeal pending the review outcome.

What To Do Now

1. Check your letter for the review offer or instructions on how to request one
2. Note the 30-day deadline — and respond before it passes
3. Write to HMRC using the address on your decision letter, with your reference number, the decision you're challenging, and your reasons
4. Keep copies of everything you send
5. Mark your calendar for 45 days from when HMRC acknowledges your request

If your review is unsuccessful, read our step-by-step guide to appealing to the tribunal and check whether you might have a reasonable excuse defence.

Further Reading

• Disagree with a tax decision or penalty — GOV.UK overview (includes review guidance)
• Section 49A TMA 1970 — direct tax review provisions
• Section 83A VATA 1994 — indirect tax review provisions
• Appeal to the tax tribunal — tribunal process
• HMRC statutory reviews: a quicker way to settle disputes — source for review outcome statistics (AAT Comment)
• Understanding perceptions of the statutory review process — HMRC Research Report 633

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax adviser, accountant, or solicitor.