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HMRC Tax AppealsUnited Kingdom
Free HMRC Tax Tribunal (T240) Appeal Letter Template
A Notice of Appeal to the First-tier Tribunal (Tax Chamber) is the formal route for escalating an HMRC tax dispute beyond an internal review in the United Kingdom. Use our free UK template to produce the companion letter for form T240 — the single Tribunal appeal vehicle for income tax, corporation tax, VAT, SDLT, Inheritance Tax, Capital Gains Tax, off-payroll working (IR35) and customs duty — lodged with the FTT (Tax Chamber) at PO Box 16972, Birmingham B16 6TZ.
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Notice of Appeal to the First-tier Tribunal (Tax Chamber)
Form T240 Companion Letter · 19 May 2026
Aisha Rahman, ACA (for Northways Engineering Limited)
Unit 7, Severn Trading Estate, Worcester WR4 9NX
01905 770224
finance@northwayseng.co.uk
19 May 2026
First-tier Tribunal (Tax Chamber)
First-tier Tribunal (Tax Chamber), PO Box 16972, Birmingham B16 6TZ
NOTICE OF APPEAL — FIRST-TIER TRIBUNAL (TAX CHAMBER) — FORM T240
Decision Ref: VAT-DEC-2026-1188-779 | UTR: 7891234567
Dear Sir or Madam,
I write to lodge a Notice of Appeal under form T240 to the First-tier Tribunal (Tax Chamber). The appeal is against the review conclusion letter (view of the matter letter) following an internal review dated 30 April 2026 (HMRC reference VAT-DEC-2026-1188-779). The matter concerns Value Added Tax (indirect tax — VATA 1994 s.83 appealable decision, s.83A review, s.84 pay-or-hardship). This appeal is lodged by a company (corporate appellant), represented by Aisha Rahman, ACA (tax adviser under a 64-8 authorisation), and is made within the 30-day period prescribed by the relevant appeal provision (the prescribed deadline is 30 May 2026). This letter accompanies the completed form T240 and copies of the decision under appeal and (where applicable) any HMRC review conclusion letter.
I write to lodge a Notice of Appeal under form T240 to the First-tier Tribunal (Tax Chamber). The appeal is against the review conclusion letter (view of the matter letter) following an internal review dated 30 April 2026 (HMRC reference VAT-DEC-2026-1188-779). The matter concerns Value Added Tax (indirect tax — VATA 1994 s.83 appealable decision, s.83A review, s.84 pay-or-hardship). This appeal is lodged by a company (corporate appellant), represented by Aisha Rahman, ACA (tax adviser under a 64-8 authorisation), and is made within the 30-day period prescribed by the relevant appeal provision (the prescribed deadline is 30 May 2026). This letter accompanies the completed form T240 and copies of the decision under appeal and (where applicable) any HMRC review conclusion letter.
1.
APPELLANT IDENTIFICATION
Appellant: Northways Engineering Limited
Capacity: a company (corporate appellant)
Unique Taxpayer Reference (UTR): 7891234567
Correspondence address: Unit 7, Severn Trading Estate, Worcester WR4 9NX
Telephone: 01905 770224
Email: finance@northwayseng.co.uk
Representative: Aisha Rahman, ACA (tax adviser under a 64-8 authorisation)
Capacity: a company (corporate appellant)
Unique Taxpayer Reference (UTR): 7891234567
Correspondence address: Unit 7, Severn Trading Estate, Worcester WR4 9NX
Telephone: 01905 770224
Email: finance@northwayseng.co.uk
Representative: Aisha Rahman, ACA (tax adviser under a 64-8 authorisation)
2.
DECISION UNDER APPEAL
Tax under dispute: Value Added Tax (indirect tax — VATA 1994 s.83 appealable decision, s.83A review, s.84 pay-or-hardship)
Type of HMRC decision: the review conclusion letter (view of the matter letter) following an internal review
Date of decision letter: 30 April 2026
HMRC decision reference: VAT-DEC-2026-1188-779
Amount of tax / duty in dispute: £42,318
Hearing preference: allocation to the Standard category under FTT (Tax) Rules r.23(1)(c) — full oral hearing
Appeal deadline: 30 May 2026 (30 days from the date of the decision or review conclusion)
Type of HMRC decision: the review conclusion letter (view of the matter letter) following an internal review
Date of decision letter: 30 April 2026
HMRC decision reference: VAT-DEC-2026-1188-779
Amount of tax / duty in dispute: £42,318
Hearing preference: allocation to the Standard category under FTT (Tax) Rules r.23(1)(c) — full oral hearing
Appeal deadline: 30 May 2026 (30 days from the date of the decision or review conclusion)
3.
BRIEF GROUNDS OF APPEAL
The appellant disagrees with the disallowance of input VAT of £42,318 on capital expenditure incurred during the 2025/26 trading year. The disallowance is on the asserted ground that the expenditure was on a partially-exempt activity; the appellant contends the expenditure relates exclusively to its taxable supplies and that HMRC has wrongly characterised the position under the recognised partial exemption methodology.
4.
DETAILED GROUNDS OF APPEAL
The disputed VAT decision is appealable under section 83 of the Value Added Tax Act 1994. The decision is challenged on the following basis:
The decision under appeal is the review conclusion letter dated 30 April 2026 upholding the disallowance of input VAT of £42,318 reclaimed on the appellant's VAT Return for the period ending 31 March 2026 (period 03/26).
1. The disputed input VAT relates exclusively to capital expenditure on a new CNC machining cell installed at the appellant's Worcester plant in November 2025. The cell is used wholly and exclusively for the manufacture of bespoke aerospace components which are zero-rated for export to non-UK customers and standard-rated for UK customers — in both cases taxable supplies for the purposes of section 26 of the Value Added Tax Act 1994.
2. HMRC has applied the standard partial exemption method on the basis that the appellant also receives a small annual rental from a sub-tenant occupying ancillary office space. Rental income is, on HMRC's analysis, an exempt supply under Group 1 of Schedule 9 of the Value Added Tax Act 1994 and gives rise to a partial exemption restriction on input VAT.
3. The appellant contends: (i) the sub-rental is de minimis within the threshold under regulation 105A of the Value Added Tax Regulations 1995; (ii) the capital expenditure on the CNC cell has no connection to the sub-rental activity (the cell is physically located in the production hall and is not capable of being used for any office-rental activity); and (iii) the use-based attribution under regulation 101(2)(d) of the Value Added Tax Regulations 1995 should be applied so that the full £42,318 input VAT is recoverable.
4. Supporting evidence: floorplan of the Worcester plant showing the CNC cell location; invoices from the equipment supplier; production records for the 2025/26 trading year evidencing 100% use of the cell for taxable supply production; a partial exemption calculation prepared by the appellant's tax adviser demonstrating the de minimis position.
The decision under appeal is the review conclusion letter dated 30 April 2026 upholding the disallowance of input VAT of £42,318 reclaimed on the appellant's VAT Return for the period ending 31 March 2026 (period 03/26).
1. The disputed input VAT relates exclusively to capital expenditure on a new CNC machining cell installed at the appellant's Worcester plant in November 2025. The cell is used wholly and exclusively for the manufacture of bespoke aerospace components which are zero-rated for export to non-UK customers and standard-rated for UK customers — in both cases taxable supplies for the purposes of section 26 of the Value Added Tax Act 1994.
2. HMRC has applied the standard partial exemption method on the basis that the appellant also receives a small annual rental from a sub-tenant occupying ancillary office space. Rental income is, on HMRC's analysis, an exempt supply under Group 1 of Schedule 9 of the Value Added Tax Act 1994 and gives rise to a partial exemption restriction on input VAT.
3. The appellant contends: (i) the sub-rental is de minimis within the threshold under regulation 105A of the Value Added Tax Regulations 1995; (ii) the capital expenditure on the CNC cell has no connection to the sub-rental activity (the cell is physically located in the production hall and is not capable of being used for any office-rental activity); and (iii) the use-based attribution under regulation 101(2)(d) of the Value Added Tax Regulations 1995 should be applied so that the full £42,318 input VAT is recoverable.
4. Supporting evidence: floorplan of the Worcester plant showing the CNC cell location; invoices from the equipment supplier; production records for the 2025/26 trading year evidencing 100% use of the cell for taxable supply production; a partial exemption calculation prepared by the appellant's tax adviser demonstrating the de minimis position.
5.
PRE-TRIBUNAL HMRC INTERNAL REVIEW
Under section 83A of the Value Added Tax Act 1994 HMRC must offer the appellant a review at the same time as it issues an appealable indirect tax decision. The appellant may accept the offer of review (in which case the review must be concluded within 45 days unless the parties agree otherwise) or appeal directly to the First-tier Tribunal. Position on review: HMRC offered a review under TMA 1970 s.49B which I accepted and the review conclusion is now adverse.
HMRC offered a review by letter dated 12 March 2026 under section 83A of the Value Added Tax Act 1994. The appellant accepted the offer by reply dated 18 March 2026. The review conclusion letter dated 30 April 2026 upheld the original disallowance. The 30-day window for appeal to the First-tier Tribunal runs from the date of the review conclusion letter.
HMRC offered a review by letter dated 12 March 2026 under section 83A of the Value Added Tax Act 1994. The appellant accepted the offer by reply dated 18 March 2026. The review conclusion letter dated 30 April 2026 upheld the original disallowance. The 30-day window for appeal to the First-tier Tribunal runs from the date of the review conclusion letter.
6.
HARDSHIP APPLICATION — VATA 1994 SECTION 84(3)
Section 84(3) of the Value Added Tax Act 1994 provides that an appeal against a VAT decision will not be entertained unless the appellant has paid or deposited the disputed tax — unless HMRC is satisfied (or, on appeal, the Tribunal is satisfied) that to do so would cause the appellant to suffer financial hardship. Hardship is to be determined on the basis of the appellant's overall position, taking into account current liquid assets, ongoing trading position and reasonably foreseeable trading prospects.
Hardship narrative:
The appellant requests that the Tribunal be satisfied that payment or deposit of the disputed VAT of £42,318 would cause the appellant to suffer financial hardship within the meaning of section 84(3) of the Value Added Tax Act 1994. The appellant's management accounts to 31 March 2026 show a net cash balance of £19,640 and accrued creditors of £58,915, including supplier liabilities falling due within 30 days. The appellant's lender has confirmed that no further facility is available against current security. The supporting evidence pack (management accounts; 13-week cash flow forecast; bank facility letter dated 22 April 2026; HMRC time-to-pay correspondence) is enclosed with this Notice of Appeal.
Hardship narrative:
The appellant requests that the Tribunal be satisfied that payment or deposit of the disputed VAT of £42,318 would cause the appellant to suffer financial hardship within the meaning of section 84(3) of the Value Added Tax Act 1994. The appellant's management accounts to 31 March 2026 show a net cash balance of £19,640 and accrued creditors of £58,915, including supplier liabilities falling due within 30 days. The appellant's lender has confirmed that no further facility is available against current security. The supporting evidence pack (management accounts; 13-week cash flow forecast; bank facility letter dated 22 April 2026; HMRC time-to-pay correspondence) is enclosed with this Notice of Appeal.
7.
CONCLUSION AND DETERMINATION SOUGHT
I respectfully request the First-tier Tribunal (Tax Chamber) to: (a) admit this Notice of Appeal as in time (or, if late, in the interests of justice under rule 20); (b) allow the appeal and substitute the correct HMRC decision; (c) direct repayment of any tax wrongly assessed or paid; and (d) make such consequential and ancillary directions as the Tribunal sees fit. I am content for the matter to be dealt with in accordance with the hearing preference set out above.
YOURS FAITHFULLY,
Aisha Rahman, ACA
Representative — 19 May 2026
Date: ____________________
REPRESENTATIVE
Aisha Rahman, ACA
Date: ____________________
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What Is an HMRC Tax Tribunal (T240) Appeal?
A T240 appeal is a Notice of Appeal to the First-tier Tribunal (Tax Chamber) — the specialist Tribunal that hears all UK tax disputes with HMRC, UK Border Force, the Welsh Revenue Authority and the National Crime Agency. The form is the single vehicle for direct tax appeals (income tax, corporation tax), indirect tax appeals (VAT, customs duty, import VAT), capital tax appeals (CGT, IHT, SDLT) and off-payroll working (IR35) Status Determination Statement challenges. The current version is T240 09.25 (Crown © 2025).
The appeal route differs between direct and indirect tax. For direct tax, the taxpayer first appeals to HMRC and may request an internal review under section 49A of the Taxes Management Act 1970 — the 30-day window for the FTT runs from the view of the matter letter under section 49C or from the original decision under section 49D where no review was sought. For indirect tax, section 83A of the Value Added Tax Act 1994 obliges HMRC to offer review at the same time as the appealable decision; the taxpayer accepts or declines and the appeal route flows accordingly. Indirect tax also requires the disputed tax to be paid or deposited before the appeal can proceed — unless HMRC (or, on appeal, the Tribunal) is satisfied that to do so would cause financial hardship under section 84(3) of the Value Added Tax Act 1994.
The FTT (Tax Chamber) is administered by HM Courts and Tribunals Service from Birmingham. The current postal address for filing form T240 and the companion letter is First-tier Tribunal (Tax Chamber), PO Box 16972, Birmingham B16 6TZ. The Tax Chamber is a separate chamber from the Social Entitlement Chamber (which hears welfare appeals from PIP / UC / ESA / HB through HMCTS Harlow PO Boxes). Late appeals — more than 30 days after the relevant decision — can be admitted by the Tribunal under rule 20 of the FTT (Tax Chamber) Rules 2009 applying the three-stage test in Martland v HMRC [2018] UKUT 178 (TCC): length of delay; reason for delay; and a balancing exercise / interests of justice.
What's Covered in This Template
Our UK HMRC tax tribunal appeal template builds the form T240 companion letter the Tribunal can act on — appellant identification, the decision under appeal, the tax-type-specific detailed grounds and (where relevant) the pre-tribunal review status, the hardship application and the Martland late-appeal three-stage test.
Seven-Way Tax Type Switch
Switches the detailed grounds and the statutory framework between income tax, corporation tax, VAT, SDLT, Inheritance Tax, Capital Gains Tax, off-payroll working (IR35) and customs duty. The right argument is built for the right tax type.
FTT (Tax Chamber) Postal Address
Pre-fills the FTT (Tax) postal address — First-tier Tribunal (Tax Chamber), PO Box 16972, Birmingham B16 6TZ. Different from the welfare chamber Harlow PO Boxes used for PIP / UC / ESA / HB appeals.
Appellant Capacity Selector
Individual taxpayer, corporate appellant, partnership (nominated partner), trustees / executors, or a tax agent acting under a 64-8 authorisation. The identification block and the signature block re-route accordingly.
Auto-Calculated 30-Day Appeal Deadline
Calculates the 30-day FTT appeal deadline from the date of the decision letter or review conclusion so the appellant can see at a glance whether the appeal is in time.
Hearing Preference (FTT Rules r.23 Categorisation)
Default Paper, Basic, Standard or Complex — plus video (HMCTS Cloud Video Platform) or in-person. The Tribunal allocates the case to the appropriate categorisation under rule 23 of the FTT (Tax Chamber) Rules 2009.
Expert: Detailed Grounds by Tax Type
Tax-type-aware detailed grounds — TMA 1970 framework for direct tax; VATA 1994 partial exemption and de minimis for VAT; FA 2003 Sch 4ZA for SDLT; IHTA 1984 reliefs and valuation for IHT; TCGA 1992 computation for CGT; FA 2020 Sch 1 status determination for IR35; commodity code and customs valuation for customs duty.
Expert: Pre-Tribunal HMRC Internal Review
Records the position on review — section 49A request, section 49B HMRC offer accepted or declined, or no review sought. The review route resets the 30-day FTT window.
Expert: VATA 1994 s.84(3) Hardship Application
For VAT and customs duty appeals, the hardship application that lets the appeal proceed without paying or depositing the disputed tax. Includes the financial hardship narrative and the supporting evidence pack.
Expert: Martland Three-Stage Late Appeal
Where the appeal is more than 30 days late, the structured Martland v HMRC [2018] UKUT 178 (TCC) analysis — length of delay; reason for delay; and the balancing exercise / interests of justice under rule 20 of the FTT (Tax Chamber) Rules 2009.
Representative Block (64-8 Tax Agent)
Where the appeal is lodged through a tax agent, the representative block records the agent's name and capacity (typically a 64-8 authorisation). The letter is signed by the representative.
How to Lodge a Notice of Appeal to the FTT (Tax)
Follow these steps to produce the T240 companion letter in a format the First-tier Tribunal (Tax Chamber) accepts across the United Kingdom.
- 1
Check the 30-Day Deadline
Note the date printed on the HMRC decision letter or the review conclusion letter — the 30-day appeal window runs from that date. The template auto-calculates the deadline once you enter the decision date.
- 2
Pick the Tax Type
Income tax, corporation tax, VAT, SDLT, IHT, CGT, IR35 or customs duty. The template adjusts the statutory framework, the detailed grounds prompt and (for VAT / customs duty) makes the hardship application available.
- 3
Identify the Type of Decision Under Appeal
Original HMRC decision, review conclusion letter (taxpayer requested) or HMRC view of the matter letter (HMRC offered). The 30-day window runs differently in each case.
- 4
Pick the Hearing Preference (FTT Rules r.23)
Default Paper (decision on the documents), Basic (short informal hearing), Standard (full oral hearing — recommended for substantive disputes), video (HMCTS Cloud Video Platform) or in-person.
- 5
Build the Tax-Type-Specific Grounds (Expert)
Income tax grounds engage assessment provisions in TMA 1970 and the substantive Income Tax Acts; VAT engages Schedule 9 (exempt supplies), partial exemption and de minimis; SDLT engages Schedule 4ZA (higher rate additional dwellings); IHT engages reliefs and valuation; CGT engages the disposal computation; IR35 engages the Status Determination Statement and the deemed employment test.
- 6
Record the Review Status (Expert)
Note whether you requested a review under TMA 1970 section 49A, accepted an HMRC offer under section 49B / VATA 1994 section 83A, or declined the offer. The review route affects when the 30-day window started.
- 7
Lodge a Hardship Application (Indirect Tax Only)
For VAT and customs duty appeals, section 84(3) of the Value Added Tax Act 1994 requires the disputed tax to be paid or deposited unless hardship is shown. Lodge the hardship application with the Notice of Appeal — the Tribunal will decide it as a preliminary matter.
- 8
Send to FTT (Tax) Birmingham and Keep a Copy
Post the completed form T240 and this companion letter to First-tier Tribunal (Tax Chamber), PO Box 16972, Birmingham B16 6TZ. Keep proof of postage. The Tribunal will acknowledge receipt and issue directions for the next steps.
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Legal Considerations — HMRC Tax Tribunal Appeal
Tax Tribunal appeals are governed by the United Kingdom tax statutes (TMA 1970, VATA 1994, TCGA 1992, IHTA 1984, FA 2003, FA 2020) and the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The framework operates the same across England, Wales, Scotland and Northern Ireland.
This template is for general information and does not constitute legal or tax advice. The Bar Council, the Chartered Institute of Taxation and the Solicitors Regulation Authority maintain registers of regulated tax practitioners. For complex appeals — particularly involving large amounts or contested findings of fact — formal representation by a barrister or solicitor specialising in tax is strongly recommended. The First-tier Tribunal (Tax Chamber) has the final word on factual findings and on legal disputes within its jurisdiction.
Reviewed for the United Kingdom
Statutory Framework — Direct Tax
Direct tax appeals operate under the Taxes Management Act 1970. Section 31 confers the right of appeal against an assessment. Section 49A allows the taxpayer to require HMRC to undertake an internal review; section 49B allows HMRC to offer review; the view of the matter letter under section 49C resets the 30-day window. Section 49D applies where no review was sought. Late appeals operate under section 49G / 49H and under rule 20 of the FTT (Tax Chamber) Rules 2009.
Statutory Framework — Indirect Tax
Indirect tax appeals operate under section 83 of the Value Added Tax Act 1994 (appealable VAT decisions). Section 83A obliges HMRC to offer review at the same time as the appealable decision — the taxpayer has 30 days to accept or decline. Section 83F provides the appeal route after review conclusion. Section 84(3) requires the disputed tax to be paid or deposited unless HMRC (or the Tribunal) is satisfied that to do so would cause financial hardship.
Statutory Framework — Capital Taxes
Inheritance Tax appeals operate under section 222 (right of appeal) and section 224 (procedural) of the Inheritance Tax Act 1984. Capital Gains Tax appeals operate under section 288 of the Taxation of Chargeable Gains Act 1992. SDLT appeals operate under Schedule 10 paragraph 35 of the Finance Act 2003 (assessment route) — the higher rate additional dwellings regime is in Schedule 4ZA of FA 2003.
Statutory Framework — Off-Payroll Working (IR35)
For engagements in scope of the medium and large private sector regime, FA 2020 Schedule 1 places the IR35 status determination on the end client. The Status Determination Statement is challenged by the worker via the disagreement process under the same Schedule; the dispute ultimately reaches the FTT (Tax Chamber) where the deemed employment income provisions in Part 2 Chapter 8 of the Income Tax (Earnings and Pensions) Act 2003 apply.
Categorisation under FTT (Tax Chamber) Rules 2009 r.23
The Tribunal allocates each case to one of four categories under rule 23 of the FTT (Tax Chamber) Rules 2009. Default Paper (rule 23(1)(a)) — small straightforward cases decided on the documents. Basic (rule 23(1)(b)) — short informal hearings. Standard (rule 23(1)(c)) — full oral hearings, the most common category for substantive disputes. Complex (rule 23(1)(d)) — high-value or technically complex cases. The categorisation affects the procedural timetable and the costs regime.
Late Appeals — Martland Three-Stage Test
Late appeals are governed by rule 20 of the FTT (Tax Chamber) Rules 2009. The Upper Tribunal in Martland v HMRC [2018] UKUT 178 (TCC) set the three-stage framework the Tribunal must apply: stage 1 — length of the delay; stage 2 — reason for the delay; stage 3 — balancing exercise / interests of justice (merits of the appeal, prejudice to each party, importance of the issue). The Martland framework is now consistently applied across all categories of late appeal.
Frequently Asked Questions
Build Your HMRC Tax Tribunal Appeal
Produce a structured, tax-type-specific Notice of Appeal companion letter the First-tier Tribunal (Tax Chamber) can act on. Whether the dispute is over income tax, VAT (with hardship), SDLT, IHT, CGT, IR35 or customs duty, the template builds the right grounds, records the pre-tribunal review position and routes the appeal to PO Box 16972, Birmingham B16 6TZ.
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