HMRC extends its pilot
In broad terms Alternative Dispute Resolution (ADR) provides a mechanism to seek a view from another member of HMRC who has not been involved in the particular case in order to see whether the issues that are preventing agreement can be resolved without the need to go to the Tribunal.
The pilot
During 2011 HMRC did a pilot to trial ADR, aimed at improving the way it resolves tax disputes for SME customers. The pilot involved taxpayers in North Wales and NW England.
During the pilot, cases were selected from those which had gone for internal HMRC Review and looked to be headed for Tax Tribunal. The results were encouraging and suggested that ADR might work at an earlier stage in the Compliance Check Process. 60% of the disputes which entered the pilot were either fully or partially resolved and the overwhelming majority were fully resolved to the satisfaction of both the customer and HMRC.
The extension of the pilot
HMRC now plans to test ADR more widely among SME customers. It wishes to test the success of ADR at an earlier stage in the compliance check process and is restricting availability of ADR to cases where an appealable tax decision or assessment has not been made.
Cases which are potentially suitable for the pilot may involve any of the following features:
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facts which are capable of further clarification
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disputes that may benefit from obtaining more suitable evidence;
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factual and/or technical matters in which there is legitimate scope for any party to obtain a better understanding of the other’s arguments;
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issues which are capable of further mediation and settlement by agreement within the framework of the Litigation and Settlements Strategy.