A new way of resolving disputes

HM Revenue & Customs (HMRC) have been testing a new way of resolving disputes, known as Alternative Dispute Resolution (ADR), with Small and Medium Enterprises and Individuals in certain regions of the UK. If you are currently embroiled in a dispute with HMRC and see no light at the end of the tunnel, ADR might be a suitable route for you to take.

How it works?

Once you have applied to HMRC they will let you know within 30 days if you can be included in the ADR process - not all cases can be accepted. If you are accepted, an independent, trained ‘facilitator’ will be appointed to help all parties reach a clear understanding of the disputed facts, with a view to helping them reach a quick and fair resolution.

Impressive stats thus far

One of the stand-out comments to come out of the initial phase of the pilot to September 2011 was that it took HMRC approximately 85% less time to resolve a dispute through ADR than through litigation, with 60% of the disputes being partly or wholly resolved to mutual satisfaction. This will have saved time and costs for both the taxpayer and the adviser, not to mention the stress and frustration saved!

Current limitations 

HMRC admit that they only have limited resources for this trial and will prioritise disputes with the greatest chance of success. If ADR does not resolve the dispute, the normal rights of appeal and review will have to be followed. The current pilot will run to the end of November 2012 for both VAT and direct taxes disputes. If this second phase of the pilot is successful there are plans to develop it further nationwide.

If you feel you have a suitable case and wish to be considered for the trial, please contact your usual tax adviser at Buzzacott.