Statutory Reviews: where do things currently stand?
James Davies · Posted on: March 18th 2026 · read
Statutory reviews play an important role in the VAT disputes process, offering taxpayers a reconsideration of decisions taken by HMRC before matters progress to litigation by an officer who has no previous background of the case.
The legislation sets a clear timeframe for HMRC to complete the review within 45 days of acceptance, unless an extension is agreed between both parties.
Anecdotally, HMRC appear to be requesting additional time in a growing number of reviews. The request for additional time is not out of the ordinary but increased instances may reflect growing pressures on the department.
The purpose of this insight is to provide an overview of the statutory review process and to consider actions a taxpayer should take.
How the review stage functions
Once HMRC accept a taxpayers request for a review, a Review Officer will be appointed to oversee it.
The purpose of the review is not to reopen the enquiry but to reassess the decision based on the information available. In many cases, reviews serve as an effective opportunity to clarify the factual position, narrow points of dispute, and in some cases, overturn decisions without the need for Tribunal proceedings.
During the review, the Review Officer may:
Consider factual and technical arguments put forward by the taxpayer
Request additional information
Engage with the taxpayer or their advisers to clarify points of dispute
Taxpayers have opportunity to provide further information at the start of the review, and often use this to refine their position, address any factual misunderstandings, or ensure the technical basis of the challenge is clearly set out.
Understanding the 45 day requirement
The statutory review framework is intended to deliver a timely mechanism for taxpayers to resolve disputes with HMRC.
Extensions to HMRC’s review timescale are permitted under the legislation by agreement. If a taxpayer does not agree to an extension before 45 days, this does not prevent HMRC from concluding the review on available information if the can still achieve this in the review period.
However, in practice, not agreeing to the extension often means that HMRC will automatically find against the taxpayer, because if a decision cannot be reached by day 45, and no extension is agreed, HMRC treat the original decision as upheld (see ARTG4850). Consequently, many taxpayers accept the extension.
Practical points to consider
For taxpayers involved in disputes it is usually recommended that the extension period is agreed. This does lead to practical implications. These may include:
Prolonged cashflow impacts.
Extended periods of uncertainty, affecting business planning and decision making.
Delays in progressing to Tribunal, which may be necessary where resolution cannot be reached.
Taxpayers should be mindful of these implications and plan accordingly. If cashflow is likely to be problematic, consideration of an application for hardship should be discussed.
Conclusion
It is in neither parties’ interest for a review to begin, without satisfactory conclusion. Taxpayers should be mindful at the outset of the review process that HMRC may need more time and plan for this eventuality.
A taxpayer can take steps to help the review officer. In my experience, the submission of a clear and comprehensive response to include any new information and highlighting areas of misunderstanding at the outset of the review period is helpful and will enable HMRC to engage with the key points of the decision.
Get in touch
MHA’s dispute resolution team assists many taxpayers across a broad range of taxes. If you want to rely on our expert support, please reach out.
