Value Added Tax Act 1994 section 85

Settling appeals by agreement

Section 85 deals with how VAT appeals can be settled by agreement between the appellant and HMRC without the need for a tribunal hearing, and the conditions under which such agreements take effect.

• Where an appellant and HMRC reach an agreement before a tribunal hearing, the outcome is treated as if the tribunal itself had decided the appeal on those terms — whether the original decision is upheld, varied or cancelled.
• The appellant has a 30-day cooling-off period during which they may withdraw from the agreement by giving HMRC written notice.
• If the agreement is made orally rather than in writing, it only takes effect once confirmed in writing by either party, and the 30-day cooling-off period runs from the date of that written confirmation.
• If the appellant notifies HMRC that they no longer wish to proceed with their appeal, and HMRC does not object in writing within 30 days, the original decision is treated as upheld without variation — as if an agreement to that effect had been reached.