What decisions can a scheme organiser appeal against under section 40K of ITEPA 2003?

Under section 40K, a scheme organiser can appeal against HMRC's decision that there was no reasonable excuse for late notification, the decision that a penalty is due, decisions contained in closure notices or default notices including specified times, and HMRC's decision as to the amount of any penalty payable.

What is the time limit for appealing an HMRC decision under section 40K?

The notice of appeal must be given to HMRC within 30 days. The 30-day period runs from the date HMRC's decision is notified for reasonable excuse appeals, from the date the penalty notice is given for penalty appeals, or from the date the relevant closure or default notice is issued.

What powers does the tribunal have when hearing an appeal under section 40K?

The tribunal can affirm or cancel HMRC's decision depending on the appeal type. For appeals about closure or default notice specified times, it can also substitute a different decision HMRC could have made. For penalty amount appeals, the tribunal can confirm the amount or substitute a different amount it considers appropriate.

Which general appeal rules apply to share scheme compliance appeals under section 40K?

The general appeal rules in Part 5 of the Taxes Management Act 1970 apply. The appeal is treated as an appeal against a corporation tax assessment, or if the scheme organiser is not within the charge to corporation tax, as an appeal against an income tax assessment, applying familiar procedural frameworks including review and tribunal procedures.

Income Tax (Earnings and Pensions) Act 2003 section 40K

Appeals

Section 40K sets out the rights of a scheme organiser to appeal against various decisions and penalties imposed by HMRC in connection with share scheme notification and compliance obligations.

A scheme organiser can appeal against HMRC decisions on penalties, reasonable excuse determinations, closure notices, and default notices
Appeals must be lodged with HMRC within 30 days of the relevant notice or decision being given to the scheme organiser
The tribunal can affirm or cancel decisions, and in some cases substitute an alternative decision or penalty amount
General tax appeal rules under Part 5 of the Taxes Management Act 1970 apply, treating the appeal as if it were against a corporation tax or income tax assessment

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