In 'Automated Decisions: Technical Note' published in October 2019, HMRC proposes new legislation for inclusion in the Finance Act 2020. The proposals mean that anything that can currently be done by an officer may instead be completed by HMRC through the use of a computer or other electronic means, whether automatically or not.

This follows a string of tax and tax penalty appeal defeats for HMRC where the tribunal has found that certain decisions were flawed when issued by a computer rather than by an actual human. It highlighted:

  • The provisions contained in the Taxes Management Act 1970 (TMA 1970) at s8, s8A and s12AA which provide for giving notice to file a return in relation to individuals, trustees and partnerships.
  • S9ZB TMA1970, which provides for the correction of a personal or trustee’s return by HMRC.
  • Paragraph 3 Schedule18 Finance Act 1998, which are the provisions for the issue of a notice to file to corporate bodies.
  • S100 TMA 1970, which contains the provisions for the making of a determination imposing a penalty under any provisions of the Taxes Acts.
  • Schedule 14 Finance Act 2003, which contains provisions for the determination of penalties in respect of Stamp Duty Land Tax. 2.4.

Although the government intends that the legislation will apply both retrospectively and prospectively, it will be in force until the Finance Act is passed.

Useful guides

Grounds for appeal: HMRC error
When can an error, mistake or procedural flaw made by HMRC provide a valid ground for making an appeal?

How to appeal a tax penalty (subscriber version)
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

External links

Automated decisions: technical guidance