Mike Down

Written by: Mike Down and Sarah Saunders

Mike Down

Partner

Virtual justice - the way forward?

For some years there have been plans to introduce virtual courts, where the participants interact via video link, hopefully saving time and money for both sides. 

This has primarily been considered for criminal cases. It is interesting therefore to hear of a civil tax case that has recently been heard via this virtual system for the first time.

As we have previously noted, HMRC has been facing increasing pressure regarding tribunal appeals against penalties. It therefore seems a good time to try a new method to reduce this administrative burden.

Fittingly the first case was a late tax return filing penalty appeal. The appellant was on his computer at home, the judge in the London court and the HMRC lawyers were in Belfast.

There seem to have been a few technical glitches on the video connection, but overall the virtual process went smoothly. The result of the appeal has not yet been announced.

We support any development which increases access to justice, and it is a bonus that this approach brings the benefit of saving HMRC and the appellants money. Tax seems an especially fruitful area for this approach as many arguments, particularly those related to automatic penalties, are factual and arguably not dependant on personal impressions and witnesses, so presenting evidence in this virtual way is unlikely to alter the outcome of a case.

There must, as ever with new technological approaches, be concern about the digitally disadvantaged. It would be a sad situation where some taxpayers are deterred from appealing because they are unable to use this approach, and cannot afford the costs of a conventional tribunal. If virtual courts become more general, to avoid a two-tier system, there would need to be access to facilities to allow people without suitable technology to participate.

Having said this, at present the costs of tribunal can deter taxpayers from appealing, especially when relatively small amounts are at stake. If the costs reduce, the number of smaller cases may increase. This would produce a beneficial increase in the overall level of justice, but reduce the financial savings for HMRC.

Let us hope this video link experiment continues and gives more taxpayers the opportunity to pay the correct tax and penalties by reducing the deterrent of disproportionate costs.

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