Tax year 2024/25 saw a record 517 cases dealt with under alternative dispute resolution (ADR) – up from 367 cases in the previous tax year – reports law firm BCLP. Of those 517 cases, 43% took longer than HMRC’s four-month target to resolve (222 outstanding cases, compared to 87 in the previous year). The firm reflects on the first-tier tribunal practice statement issued in May 2025 encouraging taxpayers to consider ADR to avoid cases going to the tribunal and pointing out that ‘unreasonable refusal’ to engage in ADR could influence cost awards at tribunal.
Kate Ison, Partner at BCLP, commented: ‘ADR can be an effective means of resolving tax disputes and its promotion by the Tribunal is a very positive step forward. However, the sharp rise in both case volume and the length of time to resolve disputes raises questions as to whether the ADR system will be able to cope with increased demand – just as the tax tribunal is actively encouraging its greater use.
‘The tax tribunal is still managing a backlog of approximately 50,000 unresolved cases. The intention is to encourage greater use of ADR as a release valve for the tribunal system but unless additional resources are dedicated to ADR from within HMRC, taxpayers may face worsening bottlenecks.’
Pinsent Masons had welcomed the ‘beefed up’ practice statement, with Jake Landman, tax disputes expert at the firm saying the updated statement could encourage more taxpayers to consider using ADR to resolve their tax disputes: ‘Taxpayers are often sceptical about the ADR procedure with HMRC, which always involves an HMRC mediator. This updated statement, alongside the possible upcoming amendments to HMRC’s approach, may provide more reasons to consider ADR.’
Tax year 2024/25 saw a record 517 cases dealt with under alternative dispute resolution (ADR) – up from 367 cases in the previous tax year – reports law firm BCLP. Of those 517 cases, 43% took longer than HMRC’s four-month target to resolve (222 outstanding cases, compared to 87 in the previous year). The firm reflects on the first-tier tribunal practice statement issued in May 2025 encouraging taxpayers to consider ADR to avoid cases going to the tribunal and pointing out that ‘unreasonable refusal’ to engage in ADR could influence cost awards at tribunal.
Kate Ison, Partner at BCLP, commented: ‘ADR can be an effective means of resolving tax disputes and its promotion by the Tribunal is a very positive step forward. However, the sharp rise in both case volume and the length of time to resolve disputes raises questions as to whether the ADR system will be able to cope with increased demand – just as the tax tribunal is actively encouraging its greater use.
‘The tax tribunal is still managing a backlog of approximately 50,000 unresolved cases. The intention is to encourage greater use of ADR as a release valve for the tribunal system but unless additional resources are dedicated to ADR from within HMRC, taxpayers may face worsening bottlenecks.’
Pinsent Masons had welcomed the ‘beefed up’ practice statement, with Jake Landman, tax disputes expert at the firm saying the updated statement could encourage more taxpayers to consider using ADR to resolve their tax disputes: ‘Taxpayers are often sceptical about the ADR procedure with HMRC, which always involves an HMRC mediator. This updated statement, alongside the possible upcoming amendments to HMRC’s approach, may provide more reasons to consider ADR.’
