The Kittel Principle | Procedure After Unsuccessful HMRC Officer Reviews


In a series of articles previously posted to this website, we have considered various aspects of the Kittel Principle’, being the means by which HMRC is able to deny input VAT to taxpayers operating in a variety of trading sectors such as, for example, mobile phones, CPUs, computer software, alcohol and the provision of labour, with a ‘Kittel decision informing the individual or corporate taxpayer of the extent to which VAT input is being disallowed.

As previously explained, a ‘Kittel decision explains the extent to which HMRC intends to disallow VAT input tax and which may lead the way to subsequent penal action, such as the issue of further VAT assessments, the imposition of financial penalties upon both a company and directors personally, removal of the company from the CIS or the cancellation of gross payment status.

An understanding of the procedures available in the event of unsuccessful reviews is, therefore, essential.

Reviews may be conducted by an HMRC Officer, an Independent Officer or, ultimately, by way of an appeal to the First-tier Tax Tribunal.

In the event of unsuccessful HMRC Officer and Independent Officer reviews limited time becomes available in which to consider how next to proceed, other than pay such assessments, penalties and interest as demanded by HMRC.#

John Veale of Kangs Solicitors gives a brief overview on such alternatives.

The Team at Kangs Solicitors offers vast experience and is highly regarded nationwide for assisting clients facing investigations by HMRC and the use by the HMRC of the Kittel principle.

Our Team is led by Hamraj Kang who is recognised as a leading expert in the field of criminal fraud investigations. He is one of only two solicitors nationally to be ranked as a ‘star individual’ for seven consecutive years in the legal directory Chambers UK.

Other members of the Team are also ranked in Chambers UK as well as The Legal 500.

For an initial no obligation discussion, please call our Team at any of our offices detailed below:




HMRC Officer Reviews | Kangs HMRC Investigations Solicitors

Following an unsuccessful review by an HMRC Officer, it may occur that a subsequent review by an Independent Officer also produces a negative finding relating to issues affecting:                 

  • Disallowance of input VAT on returns
  • Assessments as a result of disallowances
  • Penalties imposed
  • Potential company officer liability for penalties
  • De-registration for VAT
  • Loss of gross payment status

In such circumstances, an appeal may be made to the First-tier Tribunal and Alternative Dispute Resolution (‘ADR’) may be available.

The First-tier Tribunal

If both initial HMRC Officer reviews fail, then, following receipt of a letter from HMRC confirming the same, an application to the First-tier Tax Tribunal may be made within thirty days as follows: 

  • An application is normally made via His Majesty’s Court Services portal, in a prescribed fashion, setting out the reasons for the Appeal
  • The negative review letter from HMRC must be attached
  • It is not possible to apply for an Officer review and to the Tribunal at the same time
  • If HMRC has made several decisions at varying times, the normal time frame for each decision has to be observed with all matters subsequently being amalgamated
  • Should the Tax Tribunal consider the matter to be complex, it is possible to opt out of the costs regime resulting in each party meeting their own legal costs whatever the Tribunal outcome 
  • VAT due under the assessment would normally have to be paid before the matter is put to the Tax Tribunal with penalties being paid once the Tax Tribunal had concluded, if appropriate
  • A Hardship Application may be made, where appropriate when it is wished to delay payment of VAT Should a Hardship Application be successful, interest on tax due will continue to accumulate should the Tax Tribunal refuse the Appeal
  • The date which will be set for the full Hearing may be as much as two years from the date of application to the Tax Tribunal


  • ADR is available where an offer from HMRC for a review of a decision has been accepted and concluded and an Appeal to the First-tier Tax Tribunal has been accepted, or
  • if the offer for a review has not been accepted and an Appeal has been submitted and accepted by the First-tier Tax Tribunal.
  • ADR involves a HMRC officer, trained in mediation skills, who acts as an independent third party to assist in the resolution of a disputed decision.
  • It cannot be used, inter alia, regarding:
  1. HMRC delays in issuing decisions
  2. HMRC providing misleading advice
  3. Debt recovery
  4. Where HMRC is conducting a criminal investigation.

Although ADR may save time and expense in dealing with a decision, any settlement may effectively be an admission, or partial admission, of the conduct alleged.

Who Can I Contact for Advice & Help? | Kangs National Fraud Offences Defence Solicitors

If you or your business are made subject to any form of Kittel decision, assessment or penalty by HMRC, you should immediately seek professional advice.

Seeking review of a HMRC decision or making an application to the First-tier Tax Tribunal are complex procedures involving strict time limits. Consequences of failure may be dramatic given the substantial level of penalties which may be imposed by HMRC and it is essential that experienced  guidance and support is sought from the outset.

Our experienced Team will assist and provide detailed guidance regarding all aspects of HMRC investigations from onset, to Tax Tribunal or potential criminal proceedings.

If we can be of assistance, our Team is available via telephone 0333 370 4333 and by email info@kangssolicitors.co.uk.

We provide initial no obligation discussion at our three offices in London, Birmingham and Manchester.

Alternatively, discussions can be held virtually through live conferencing or telephone.


Hamraj Kang

Email Hamraj

07976 258171

020 7936 6396

0121 449 9888

John Veale

Email John

0121 449 9888

020 7936 6396

0161 817 5020

Tim Thompson

Email Tim

0121 449 9888

020 7936 6396

0161 817 5020

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