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HMRC extends Alternative Dispute Resolution trial to all ‘customers’

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The Alternative Dispute Resolution (ADR) service is now available to ‘all customers nationwide’, HMRC announced yesterday. Revised guidance states that ADR ‘provides Small and Medium Enterprise (SME) and Individual customers with an alternative way of resolving tax disputes in compliance checks’.

An ADR pilot was launched in January for SMEs in the North West and South West of England, Wales and London. ADR uses ‘independent HMRC facilitators’ to resolve disputes during a compliance check before a decision or assessment has been made.

Jim Stevenson, Assistant Director Local Compliance, said: ‘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. The aim is to resolve the dispute or, if not, as many issues as possible. HMRC facilitators help all parties reach a shared and full understanding of the disputed facts and arguments. Because there are often communications issues the facilitator will help explain what each side is trying to say to the other.’

Geoff Lloyd, Director in Ernst & Young’s tax controversy team, said ADR had been ‘remarkably successful’ in resolving tax disputes of ‘all shapes and sizes’.

But he pointed out that ‘almost 20,000 disputes’ were ‘in the queue’ for the Tax Tribunal. ‘There's a need for a lot more ADR than we've seen to date and opening up the process to individuals and SMEs throughout the UK is a positive development,’ he said.

‘There's more to be done too for large and complex cases. Only a handful of cases so far have been resolved using mediation through the large business and complex case pilot.  While HMRC's aspiration of managing 50 of these disputes this year is a good starting point, there is scope for bringing in mediators earlier and in more cases, especially as the pilots have shown that ADR can lead to better and faster outcomes all round.’