HMRC today published a small but important change to its Alternative Dispute Resolution (ADR) guidance which will allow taxpayers to apply for ADR at any stage of an enquiry and at any stage of tribunal proceedings.
ADR is a key tool available to taxpayers to efficiently accelerate dispute resolution. While ADR has been available for a number of years, many consider it to be underutilised.
However, today’s amendment should encourage a greater number of people to take advantage of the service offered by HMRC. The use of HMRC mediators is a free service. The Tribunal Service also supports the use of ADR in appropriate cases, in line with the Statement published by Chamber President, Greg Sinfield on 15 June 2020, which states that ‘All parties should consider whether ADR may be appropriate and to keep the possibility of ADR in mind as the appeal progresses.’
Commenting on the change, Dawn Register, Tax Partner at BDO said: “Even pre-lockdown, many taxpayers were concerned about the stress and uncertainty of a long running tax dispute with HMRC. Delays can leave businesses and individual taxpayers facing unknown bills, both in terms of additional tax liabilities, interest and potential penalties.
“The ADR unit within HMRC has adapted well to the current context and the virtual meetings they are trialling seem to work well in lieu of the traditional face to face mediation day.
“ADR mediators can play a crucial role in helping to unlock disputes and this latest update to HMRC’s guidance should encourage a greater number of people to seek a speedy and cost-effective resolution. This could be particularly beneficial for businesses managing cash flow through a downturn.”
Further guidance from HMRC on the ADR procedure and when a case is appropriate for ADR can be found at https://www.gov.uk/guidance/tax-disputes-alternative-dispute-resolution-adr.
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