HMRC’s Alternative Dispute Resolution Pilot
HMRC have launched a pilot exercise involving Alternative Dispute Resolution (ADR) to run from February 2011 to July 2011. ADR involves an alternative way of resolving tax disputes for small and medium sized businesses (SMEs) after the formal HMRC decision process has been exhausted. ADR would be an alternative to taking a case to the Tribunal and should save both sides significant costs.
HMRC propose to identify a small number of direct tax and VAT cases which are suitable to be included as part of this trial. HMRC will then invite the agreement of taxpayers to take part in the ADR pilot.
If agreement is obtained HMRC will agree a limited extension to the review period during which they will seek to work collaboratively with taxpayers and agents to progress matters and if possible reach resolution of the tax dispute.
HMRC have said that they will ensure that wherever these discussions do not resolve a dispute that the papers will be returned to the originating review team. The review team will then complete their review before upholding, varying or cancelling the relevant appealable decisions in the normal way.