Small companies invited to resolve tax disputes

Individuals and small companies in dispute with the tax authority were yesterday directed towards a new service aimed at resolving the issue quickly, fairly and at low cost, while avoiding a tribunal.

Piloting the service in January, HM Revenue & Customs said at the time that smaller businesses in London and three other regions could settle their disputes much earlier if they used the ADR.

Having so far demonstrated that it can save both time and money (for HMRC and for taxpayers), the Revenue says its Alternative Dispute Resolution Service is now open to individuals and small firms wherever they are based in the UK.

Suitable cases might be disputes that could “benefit from obtaining more suitable evidence,” or those that might feature “matters in which there is legitimate scope” for HMRC (or the taxpayer), “to obtain a better understanding of the other’s arguments.”

HMRC also stated that ADR, which uses “independent facilitators,” does not affect existing processes or review and appeal rights, and covers both VAT and direct taxes.

But the real independence of the facilitators appears open to question as, while such personnel will not have been involved in the dispute, “the facilitators are HMRC members of staff”.

Trained in dispute resolution techniques, these officials are briefed to “help all parties reach a shared and full understanding of the disputed facts and arguments” – effectively making clear “what each side is trying to say to the other.”  

“The aim is to resolve the dispute or, if not, as many issues as possible,” added HMRC assistant director of local compliance Jim Stevenson.

“The pilot has shown that ADR can resolve disputes without having to go to a tribunal – saving both time and money. It allows us to work together with our customers and resolve disputes much earlier than at present.”

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