The short answer
HMRC dispute resolution starts by identifying the procedural stage, issues, evidence, law, amount and deadline. An open enquiry is not the same as an appealable decision. A direct-tax appeal is usually due within 30 days; statutory review, ADR and tribunal are distinct routes, while an HMRC complaint addresses service rather than the tax outcome. Protect statutory deadlines throughout.
What is HMRC dispute resolution?
HMRC dispute resolution is the structured process of dealing with disagreement about a tax check, claim, decision or penalty. It can begin while a compliance check is still open and may continue through an appeal, statutory review, Alternative Dispute Resolution or the independent tax tribunal.
The objective is not simply to produce a longer technical submission. A strong dispute position identifies the exact point in issue, the facts and evidence relevant to it, the applicable law or guidance, the amount at stake and the procedural route available. Deadlines must be protected even while the parties continue talking.
Have you received an HMRC letter about an innovation tax claim?
InnoFund can assess the questions, immediate deadlines and evidence position, then explain the appropriate enquiry or dispute route before a response is committed.
What is the difference between an enquiry and a dispute?
An enquiry or compliance check is HMRC’s examination of a return, claim, records or tax position. HMRC may ask for information and explanations before deciding whether an adjustment is needed. A dispute exists when the company and HMRC disagree about facts, interpretation, amount or process. Disagreement can therefore arise during an enquiry, before HMRC has issued an appealable decision.
| Stage | What is happening | Immediate priority |
|---|---|---|
| Information request or enquiry | HMRC is testing the return or claim and gathering facts. There may not yet be an appealable decision. | Confirm scope, authority, relevance and response date; preserve and organise the underlying evidence. |
| Technical disagreement | The parties disagree about facts, qualifying conditions, methodology or interpretation while the check remains open. | Define each issue and distinguish factual evidence from legal or technical argument. |
| HMRC decision or closure | HMRC has formalised an adjustment, refusal, assessment or penalty and should state the challenge route. | Read the decision letter and protect the appeal deadline, usually 30 days for a direct-tax decision. |
| Appeal, review or tribunal | The company is using a statutory challenge route. | Comply with the procedural timetable while refining the evidence, grounds and amount in dispute. |
| Service complaint | The concern is delay, communication, conduct or another service failing rather than the tax conclusion itself. | Use the complaint route without assuming it replaces an appeal or pauses tax and interest. |
What happens during an HMRC compliance check?
HMRC can check the figures and calculations in a return, the amount of tax paid and eligibility for allowances or reliefs. The opening letter normally identifies the officer and the area being checked. HMRC may ask for documents, explanations, a meeting or access under its information and inspection powers.
For an R&D tax relief enquiry, questions may cover the scientific or technological advance, uncertainties, competent professionals, project boundaries, qualifying activities, cost categories and calculation. Patent Box, Capital Allowances and Land Remediation Relief checks raise different technical and evidential questions. A generic response should not be recycled across reliefs.
First-response checklist
- Keep the complete letter, enclosures and delivery record.
- Record every response, appeal, payment and limitation deadline.
- Confirm the company, tax, accounting period, claim and projects in scope.
- Identify whether the request is informal or a statutory information notice.
- Preserve the submitted return, computation, claim form and source records.
- Map each HMRC question to the evidence and person able to answer it.
- Confirm adviser authority and who will control correspondence.
- Escalate immediately if fraud, criminal investigation or litigation is indicated.
Do not ignore a request because the claim was prepared by an adviser. The company remains responsible for its return and should understand what was submitted. Equally, do not send an unstructured data dump: establish what is required, whether it is held, and how it answers the issue.
How should an R&D enquiry response be built?
The technical and financial positions should be developed together. The project narrative must explain the advance and uncertainties in terms that match the contemporaneous work. The cost analysis should reconcile back to the ledger and show why each category and apportionment is permitted.
- 01
Reconstruct the filed position
Secure the exact Company Tax Return, computation, Additional Information Form, technical report and working papers that HMRC is checking.
- 02
Define the disputed questions
Create an issue list covering facts, technical qualification, statutory interpretation, quantum and procedure. Avoid allowing several different questions to collapse into one argument.
- 03
Test the evidence
Interview the competent professionals and reconcile their explanation to project records, contracts, payroll, invoices and calculations.
- 04
Answer proportionately
Respond to the questions asked, identify enclosures, explain any unavailable record honestly and distinguish evidence from inference.
- 05
Maintain a decision log
Record concessions, unresolved issues, requested actions and deadlines so correspondence remains consistent throughout the check.
Can HMRC charge a penalty after an enquiry?
Potentially. A tax adjustment and an inaccuracy penalty are separate questions. HMRC considers the reason for the inaccuracy, including whether reasonable care was taken and whether conduct was careless, deliberate or deliberate and concealed. The circumstances and quality of disclosure can affect the penalty position.
A rejected relief claim does not automatically prove careless or deliberate behaviour. Conversely, relying on an adviser does not automatically establish reasonable care. The company should retain evidence of the checks, competence, instructions, assumptions and review applied when the return was filed. Any penalty explanation should address the statutory behaviour test rather than only repeating the technical claim argument.
How do you appeal an HMRC decision?
The decision letter should say whether there is a right of appeal and how to use it. For a direct tax such as Corporation Tax, the deadline is usually 30 days from the date of the decision letter. The appeal should identify the decision, what the company disagrees with and why. It can also include the correct figures and supporting information.
Not every letter or opinion is an appealable decision. If an enquiry is still open, the correct step may be to answer, narrow the issues, request clarification, apply for ADR or consider whether a formal closure route is available. Obtain procedural advice where the status is uncertain.
A continuing conversation does not protect an appeal deadline
If HMRC has issued an appealable decision, preserve the statutory route even if the caseworker is still discussing settlement. A complaint or ADR application is not a substitute for lodging an appeal in time.
What is an HMRC statutory review?
A statutory review is carried out by a review officer in a different HMRC team who was not involved in the original decision. For direct tax, the company must first appeal to HMRC. If the dispute remains unresolved, HMRC may offer a review, or the company may request one after making its appeal.
HMRC says reviews usually take 45 days, although the review officer will make contact if more time is needed. The review can uphold, vary or cancel the decision. If the company disagrees with the review result, it usually has 30 days from the date of that letter to notify an appeal to the tax tribunal.
When can Alternative Dispute Resolution help?
HMRC’s Alternative Dispute Resolution process uses an HMRC mediator trained in mediation skills to work with the company and case officer. The mediator helps the parties focus on unresolved areas and repair communication, but does not take over responsibility for the dispute or decide the legal answer.
ADR may help where
- communications have broken down;
- facts or assumptions are disputed;
- the parties do not understand why evidence is being rejected;
- the enquiry has stalled or issues need narrowing; or
- a structured discussion could identify what requires a legal ruling.
ADR does not replace
- a valid appeal or tribunal notification;
- the need to provide relevant evidence;
- a decision on a point that only a tribunal can determine;
- the separate HMRC complaint process; or
- specialist legal advice in litigation or fraud matters.
ADR applications are considered case by case and HMRC can reject cases it considers unsuitable. HMRC’s current guidance allows an application at any stage of an enquiry and at any stage of tribunal proceedings, but additional steps apply after a decision or statutory review. Check the current eligibility and timing before applying.
What happens at the tax tribunal?
The First-tier Tribunal is independent of HMRC. A company can notify an eligible appeal to the tribunal after the relevant statutory steps. The process, directions, evidence and hearing route depend on the case category and issues. A tribunal can determine the appeal; it does not act as a general mediator or adviser to either side.
Tribunal proceedings introduce formal procedural and cost considerations. Tax advisers, solicitors and barristers may have different roles. Build the team around the dispute: technical industry evidence, tax analysis, valuation, witness evidence and legal advocacy should be coordinated, but each professional should act within their competence and regulatory scope.
What is the difference between an appeal and a complaint?
| Issue | Normal route | What it addresses |
|---|---|---|
| HMRC disallows relief or changes the Corporation Tax position | Appeal, review and potentially tribunal | The correctness of the tax decision. |
| HMRC issues an inaccuracy penalty | Penalty appeal, review and potentially tribunal | Whether the penalty is due and its statutory amount. |
| Unreasonable delay, poor communication or handling | HMRC complaint process | Service and administration, not the substantive tax result. |
| Factual misunderstanding or stalled dialogue | Direct engagement and potentially ADR | Clarifying evidence, assumptions and areas of agreement. |
A case can require both an appeal and a complaint. HMRC says tax should continue to be paid while a complaint is handled, and a complaint submitted instead of an appeal can delay the response without protecting appeal rights.
Can an adviser deal with HMRC for the company?
Yes, once HMRC has the appropriate authority. The route can differ between ongoing Corporation Tax representation and authority limited to one compliance check. The company should decide who owns the overall correspondence, which specialists contribute, and who has authority to agree facts, figures or settlement.
Changing or adding an adviser does not extend an HMRC deadline. Obtain the full file from the existing adviser, including working papers and correspondence, and tell HMRC clearly who is acting and for what scope.
How does InnoFund support an HMRC dispute?
InnoFund’s role is to connect tax, technical and commercial evidence for innovation-related claims. Support can include an initial case assessment, issue and deadline mapping, claim reconstruction, technical interviews, financial reconciliation, correspondence support, ADR preparation and coordination with legal professionals where required.
Start with the letter and the filed claim
Bring the HMRC correspondence, submitted return and claim documents to the first conversation. We will identify the immediate procedural step and the expertise needed to assess the position.
For specialist support with an existing enquiry or disputed claim, explore our HMRC dispute resolution service.
Frequently asked questions
Is an HMRC enquiry the same as a dispute?
No. An enquiry is HMRC’s examination of a return or claim. A dispute develops when the parties disagree about a material fact, rule, amount or procedural step. Many enquiries are resolved before a formal appealable decision.
How long do I have to appeal an HMRC Corporation Tax decision?
The deadline is usually 30 days from the date of the decision letter, but the letter and applicable legislation control. Act immediately if the deadline is close or has passed.
Does applying for ADR stop the appeal deadline?
No. HMRC states that ADR does not affect appeal or statutory-review rights. Protect all appeal and tribunal deadlines while an ADR application or process is underway.
Is the HMRC mediator independent of HMRC?
The mediator is an HMRC officer trained in mediation skills. They facilitate discussion and do not take over responsibility for the dispute. The First-tier Tribunal is institutionally independent of HMRC.
Can HMRC penalise a company if an R&D claim is reduced?
A reduction does not by itself determine a penalty. HMRC must consider the statutory behaviour and disclosure rules. Evidence of the care taken in preparing, checking and approving the claim is important.
Should I answer HMRC if the previous adviser prepared the claim?
Yes. The company remains responsible for the return. Obtain the preparation file, preserve deadlines and ensure any response accurately reflects the company’s records and competent professionals.
Can I complain about delay and appeal the tax decision?
Potentially, because they address different issues. Use the complaint process for service failures and the statutory appeal route for the tax decision. Do not assume one pauses the other.
Can InnoFund take over an existing HMRC enquiry?
InnoFund can assess and support innovation-tax enquiries within its expertise once scope, records and HMRC authority are agreed. The first review should identify deadlines, the filed position and whether legal representation is also required.
Check the detail
Sources & scope
United Kingdom. HMRC compliance, appeal, review, ADR, tribunal and complaint guidance checked on 5 September 2026. The decision letter and legislation for the tax and period control the available route and deadline. Fraud, criminal investigation, judicial review, tribunal litigation and professional-conduct issues require appropriately qualified legal or other specialist advice.
This is an InnoFund explanation, not official guidance or advice on a particular claim. The facts, relevant law and applicable scheme rules must be considered together.
Sources checked: 5 September 2026. This is separate from expert sign-off.
- HMRC: Tax compliance checks
What HMRC can check, information requests, outcomes and appeal route
- HMRC: Get help with a compliance check
Rights, records, representation and support during a check
- HMRC: Disagree with a tax decision or penalty
Public overview of challenge routes
- HMRC: Appeal a tax decision
Direct-tax appeal content and usual 30-day deadline
- HMRC: Statutory review
Independent HMRC review team, usual 45-day period and outcomes
- HMRC: Alternative Dispute Resolution
Mediation role, suitability, timing and process
- HM Courts and Tribunals Service: Appeal to the tax tribunal
Independent First-tier Tribunal route and procedure
- HMRC: Penalties for inaccuracies CC/FS7A
Behaviour, disclosure and penalty framework
- HMRC: Complain about HMRC
Service complaints, two-tier process and distinction from appeals
- HMRC: Authorising a tax agent
Corporation Tax and compliance-check authority
- HMRC: Litigation and Settlement Strategy
HMRC framework for resolving civil tax disputes
- HMRC Corporate Intangibles R&D Manual: contact details
CIRD80350; current R&D technical and general-query routes
- HMRC: R&D Disclosure Service
Correcting excessive R&D claims and prescribed disclosure route