ADR covers both VAT and direct taxes disputes, and entering into the ADR process will not affect the taxpayer’s existing review and appeal rights. All taxpayers (companies, businesses and individuals) can ask to use ADR and in some cases, HMRC may even suggest it as a way to resolve issues. Disputes on most tax issues and can be resolved using ADR, although it cannot be used for cases being dealt with by HMRC's criminal investigators, requests for time to pay or for disputes regarding fixed penalties on the grounds of reasonable excuse. The most suitable cases for mediation are where:
- You and HMRC have different views on exactly what’s happened - the facts
- Communication between you and HMRC has broken down
- You need to know why HMRC haven’t agreed evidence that you’ve given them and why they want to use other evidence
- HMRC need to explain why they need more information from you; and
- You’re not clear what information HMRC has used and think they may have made wrong assumptions.
ADR cannot guarantee resolution of the dispute but, by the end of the process, taxpayers will have clarity on the outstanding issues and what happens next.