Appealing against a tax assessment

jimmo

As a former Inspector of Taxes can I make a few points?
You making an appeal against an assessment, or an HMRC amendment to your Self Assessment does not automatically produce higher penalties.
Just to get the obvious out of the way first, if you prove your case that no Capital Gains Tax is chargeable there cannot be any interest or penalties.
However, if HMRC prove their case that there is tax payable then interest and penalties will arise. The interest runs from the date that the tax should have been paid until it is paid and the fact that you are in dispute with HMRC has no bearing on that. Therefore the longer your dispute goes on the more interest will accrue (if any is due).
On the other hand, the amount of any penalty you may be charged depends, very significantly on the extent to which you co-operate with HMRC during the Enquiry.
Co-operation means being open and honest answering all questions put to you and providing any information /evidence requested but it does not mean rolling over and giving in.
If you have fully co-operated with HMRC but you have ended up with a disagreement which needs to be determined by the Commissioners there is absolutely nothing wrong with that and any penalty will not be increased in respect of that.
However, if your appeal is seen to be a frivolous one, aimed, more at delaying the inevitable rather than a genuine belief that HMRC is wrong then your delaying tactics will cost you in a higher penalty.
Even then, if you feel the penalty is excessive, you will have the right to appeal to the Commissioners against the penalty.
Now for the “frankly” bit, I can’t help the feeling that you are out of your depth. In my opinion Capital Gains, as a subject, is far more intricate than the mechanics of going through the appeals procedure.
I may be wrong, but the fact that you found it necessary to ask on this forum about the cost of making an appeal means to me that you really don’t have much idea about taxes in general.
In those circumstances, you taking on HMRC could be a huge mistake.
I can also appreciate you don’t want to publish war and peace on here and that is your choice. However, if you know as little about Capital Gains Tax as I suspect then you have 2 choices. Give us the full story in the hope we can help, or get some quality professional advice before you dig an even bigger hole for yourself.