Taxes Management Act 1970 section 56

Payment of tax where there is a further appeal

Section 56 deals with what happens to tax payments when a party who has already appealed a tax assessment decides to appeal further — for example, from the First-tier Tribunal to the Upper Tribunal or a higher court.

• Tax must be paid or repaid in line with the outcome of the initial appeal, even if a further appeal has been lodged.
• If a higher court or tribunal changes the assessment, any overpaid tax is refunded (with interest if awarded), and any underpaid tax becomes due within 30 days of HMRC issuing a notice of the amount payable.
• Where an accelerated payment notice has been issued and the assessment counteracts the tax advantage that triggered that notice, HMRC can apply to the court or tribunal for special protections.
• The court or tribunal may permit HMRC to withhold repayments or require the taxpayer to provide adequate security before any repayment is made, if this is necessary to protect the revenue.