Alternative dispute resolution (ADR) is for cases where an individual or company and HMRC disagree over the tax liability, or where communication between them has broken down in some way. ADR can help both sides reach an agreement or identify the contentious issue. It is a way of attempting to resolve the matter without the need, cost and hassle of involving the tax tribunal.

ADR can be used during the enquiry or once HMRC has decided what tax is payable and the matter is heading towards a formal decision by the tax tribunal. HMRC does not accept all cases into ADR and considers whether the application is relevant.

ADR does not affect the individual’s or company’s right to appeal to the tax tribunal or request for a statutory review of HMRC’s decision. Moore Kingston Smith knows how the system works, so we can shoulder the burden on the individual’s or company’s behalf.

How ADR works

HMRC allocates a mediator to work with both sides to attempt to resolve the matter. Alternatively, an independent commercial mediator can be appointed at the cost of the individual or company.

The mediator requires the individual or company and HMRC to participate fully in the process (which must not exceed 90 days) and provide all information requested. Normally, both sides are required to attend a mediation meeting, which the mediator proactively facilitates.

Preparation for the mediation meeting is the key to success and it is essential the individual or company gets it right. Careful consideration should be given to the statement setting out the contentious points to achieve the best results. While there is no guarantee of success, ADR almost always assists both sides to clarify the disputed issues.

Expert advice at the outset

Getting expert advice can make an enormous difference to the outcome for the individual. Our tax dispute resolution specialists have decades of experience of bringing even the most convoluted of disputes to a successful conclusion. The cost of the advice pales into insignificance next to the potential saving in tax liability.

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