The UK's small and medium-sized enterprises (SMEs) will benefit from the introduction
of a new dispute resolution service, with the launch of a pilot scheme underway.
HM Revenue and Customs (HMRC) launched the Alternative Dispute Resolution (ADR)
on January 9. It is a pilot scheme intended to offer SMEs an alternative way
of resolving tax disputes in compliance checks. Initially this stage of the
trial will be limited to taxpayers based in North Wales and North West England,
and follows on from an earlier trial, under which HMRC says 60% of disputes
were either fully or partially resolved.
ADR involves an independent person from HMRC - a 'facilitator' - who has not
been involved in the dispute before, and who will work with both the taxpayer
and the HMRC case owner to try to broker an agreement between them. It aims
to find a fair and quick outcome for both parties, helping to reduce their costs
and avoid a tribunal.
According to HMRC, ADR has proven to be an effective way of resolving tax disputes
in a quick and efficient way, not just for tax but in the commercial world as
well. It covers both VAT and direct taxes disputes, and entering into the ADR
process will not affect existing review and appeal rights.
HMRC suggests cases potentially suitable for this pilot may involve facts that
are capable of further clarification, disputes that might benefit from obtaining
more suitable evidence, or factual and/or technical matters in which there is
legitimate scope for any party to obtain a better understanding of the other’s
arguments. In addition, an ADR may be helpful in resolving issues which are
capable of further mediation and settlement by agreement within the framework
of the Litigation and Settlements Strategy (LSS).
HMRC has also set out a list of cases not suitable for the pilot. These include
cases which cannot be legitimately settled within the parameters of the LSS
other than by litigation, and issues which require clarification in the wider public
interest. These might include matters of industry-wide application, issues linked
to or involving co-ordinated appeals issues (“stood behind” cases)
e.g. ‘Compound Interest’ type disputes, and cases that could only
be resolved by an HMRC departure from its established technical or policy view.
Jim Stevenson, HMRC’s Assistant Director, Local Compliance, said: “ADR
will help SMEs resolve disputes without having to go to a tribunal – saving
them both time and money. It is a good opportunity for HMRC to work together
with our customers to potentially resolve disputes much earlier than at present.
The facilitators are HMRC members of staff who have been trained in ADR techniques
and have not been involved in the dispute."
“We have found that often there are communication problems. So the HMRC
facilitator will help all parties reach a shared and full understanding of the
disputed facts and arguments. They will also ensure there is good communication,
and help explain what each side is trying to say to the other. The aim is to
resolve the dispute or, if not, as many issues as possible,” Stevenson
concluded.
LAWANDTAX-NEWS.COM
