Individual income tax and capital gains tax

Under self-assessment, appeals by taxpayers are made, in the first instance, to the Inland Revenue.

Of the 5 million or so appeals made per year, only around 2% prove contentious: the remainder are known as delay cases and are quickly settled once the accounts are agreed or the necessary further information provided.

Of the contentious appeals, some are settled by agreement between the taxpayer and the Inland Revenue. The remainder proceed to an appeal hearing before the General Commissioners or the Special Commissioners.

Both the General Commissioners and the Special Commissioners are independent and appointed, like judges, by the Lord Chancellor. The General Commissioners are laymen, acting part-time and unpaid; they are usually local businessmen in the district, sometimes surveyors or accountants. On legal questions they are assisted by a clerk. The Special Commissioners are solicitors, barristers, or advocates. The General Commissioners usually sit in panels of three, the Special Commissioners two or one.

The taxpayer has some choice over which body to appeal to; but certain technical questions, particularly those involving trusts or capital gains tax, have to go to the Special Commissioners. The choice of tribunal should be discussed with the taxpayer's professional adviser.

The taxpayer may represent him or herself, or may be represented by an accountant, solicitor or barrister. The taxpayer has the option of not attending the hearing, although in this case a barrister or solicitor must be used.

Members of Gray's Inn Tax Chambers frequently conduct cases before the General or Special Commissioners on behalf of taxpayers.

The taxpayer, and the Inland Revenue, have the right of appeal from the General or Special Commissioners to the High Court, or sometimes direct to the Court of Appeal. For an appeal to the High Court or beyond, a barrister (or a solicitor advocate) is required.

At the Commissioners level, except in very unusual cases, costs are not usually awarded to either side: that is, if the appeal is unsuccessful, the taxpayer is not normally required to pay the Inland Revenue's costs -- and vice versa.