ADR is a mediation process where both parties come together to discuss the points that are in dispute. HMRC appoints a trained mediator, with no prior knowledge of the case, to help facilitate discussions and enable both parties to recognise the merits in one another’s viewpoints. At Buzzacott, we insist on the presence of our own accredited mediator to work alongside HMRC’s. This provides our clients with the assurance that at all times, HMRC’s position will come under just as much scrutiny as their own. In this case, that proved crucial.
Despite the FTT judge having indicated there were inaccuracies in the data held by HMRC, HMRC continued to hold an entrenched position throughout the opening exchanges of ADR, both in terms of the tax assessments and the behaviour of the client. However, as an Accredited Mediator, I challenged HMRC asserting that Mrs K’s lifestyle did not resemble someone with the level of omissions HMRC were alleging. HMRC then revealed a cash flow test it had performed that indicated Mrs K’s sales, while still being understated, were significantly lower than shown in the data provided by the pet insurer. With HMRC’s consent, this information was then relayed to Buzzacott for the very first time.