HMRC is testing out the Alternative Dispute Resolution methods (ADR) as a potential new way of resolving tax disputes. In ADR a third person (the ‘facilitator’), who has not been previously involved in the dispute, works with both the taxpayer and HMRC to try to broker an agreement without the need to go to the Tax Tribunal.
The pilot began on 7 February 2011. It is looking specifically at the Small and Medium Enterprise (SME) sector. For the pilot, the facilitator will be an HMRC employee. They will have some training in facilitation. This facilitator will work closely with the taxpayer (and their agent if they have one) and the HMRC officer who has been dealing with the case, in an open, flexible and objective way to see if the dispute can be settled.
For the pilot, the taxman will select from cases where an HMRC decision is in dispute and the taxpayer is already within the Internal Review process.
HMRC will contact potential participants initially by phone and, if they are interested in taking part, will send them further information. Taking part is entirely voluntary. Where the taxpayer has an agent, HMRC will contact the agent. HMRC will also consider requests from SMEs to be included in the pilot.
Taking part in the pilot doesn’t affect the taxpayer’s rights to have an internal review or to go to the Tribunal. If ADR does not resolve the dispute, the case simply returns to the original review team to complete their review.
HMRC want to test the theory that a tax dispute can be settled by agreement in a quicker, easier and more cost-effective way than the usual routes. It may not always be possible to settle a dispute in this way.
Lynam Tax Dispute Experts have decades of experience in sorting out contentious issues with the taxman.
*For a free and totally confidential initial discussion call Paul Lynam now on: 0845 643 9997.