HMRC widens ADR access while making the service covid age-ready
Contractors’ tax advisers have given a cautious but warm welcome to HMRC offering its Alternative Dispute Resolution service virtually, and at any stage before the tribunal date.
In an email, HMRC described the video phone update and the removal of a deadline for ADR applicants as “important,” and relating to covid-19 and tribunal rule changes, respectively.
Sent to accountants, the email states: “Recent changes to the tribunal rules means that we can now consider ADR applications at any stage of the process up to the date of the tribunal.”
'ADR had a few hiccups'
Tax dispute expert Jesminara Rahman, who was HMRC’s ADR design lead from 2012-14 (when the service first launched), is among the advisers backing the updates.
“Finally, HMRC are offering video conferencing facilities [to ADR applicants] through Skype for Business.
“[And] ADR applications regarding tax disputes can now be accepted at any stage before the tribunal date.
“This was how it was originally intended”, says Rahman, now a director at HMRC dispute advisory Tax Resolute. “But the ADR journey had a few hiccups on the way.”
'HMRC's limited budgets'
David Ramsdale , another former HMRC facilitator of the ADR, which taxpayers use to resolve or narrow issues they are at loggerheads with HMRC about, is also pleased.
But with a key qualification. “[These are] all welcome changes,” he said, “providing access to face-to-face meetings isn't restricted in appropriate cases due to HMRC's limited budgets or resources”.
Now a consultant, Ramsdale was referring to the HMRC email announcing the ADR updates stating a further, third development.
'No longer offered routinely'
“The way we work in the future will also be changing,” the Revenue wrote.
“We are likely to offer face-to-face meetings again, but they will be only one of several options available to the mediator when considering how to help you to resolve your dispute and will no longer be offered routinely in every case.”
The hope from advisers is that restricting the quantity might boost the quality.
“One of my concerns has been seeing cases where the HMRC Mediator has undertaken little pre-meeting preparation and relied too much on the meeting,” says Ramsdale.
“But a good HMRC mediator can resolve a lot of their cases without the need for a meeting by liaising with the parties to fully understand the obstacles to progress”.
'Some disputes need a face-to-face'
“You can see the signs of a good ADR facilitator via the prep work undertaken”, agreed Mr Rahman, posting on LinkedIn.
“This has been very relevant to the recent mediations via teleconference. [But] then there are some tax disputes that needs a face-to-face mediation.”
And some disputes still probably won’t be accepted for ADR if the application is made shortly before the FTT trial date, despite the ‘apply at any stage’ vow, says Macfarlanes.
'Taxman was out of step'
“Previously, HMRC’s policy was generally to reject applications for ADR made after HMRC had submitted their statement of case”, the law firm explained in a guest post for Lexology.
“Or [it was generally to reject applications made] within 10 days of the deadline for submission. [So] overall, the change in HMRC’s policy is to be welcomed.
“HMRC’s previous view was out of step with the message from the courts and tribunals that taxpayers should seek to resolve their disputes with HMRC as efficiently and cost-effectively as possible.”
Tempering the optimism, the firm’s James Drake-Linney added: “It remains to be seen how HMRC apply their more flexible policy and whether it results in more tax disputes being referred to and resolved through ADR.”
The comments come after David Liddle, CEO of The TCM Group, said that having “designed and delivered” the training for HMRC’s tax dispute mediators, he would welcome receiving feedback on what their next programme of professional development ought to contain to 'enhance' the ADR.