Tax dispute service gives resolution to most applicants

Two-thirds of applicants to a trial scheme designed to help small traders and individuals at loggerheads with the taxman have come away with a full or partial resolution to their dispute.

In an update on the Alternative Dispute Resolution pilot, HM Revenue & Customs said the “vast majority” of such applicants emerged with their dispute being fully resolved.

Of those cases, 33 per cent came to a resolution due to Revenue officials “educating” the applicant about “the correct tax position,” HMRC said in an evaluation of the pilot.

But an additional 23 per cent of the cases that resulted in a full resolution owed to “educating the HMRC decision-maker about the correct tax position,” implying the tax official’s initial understanding was incorrect. Ten per cent of partial resolutions also came about after the decision-maker at HMRC was set straight about the correct tax position.

Elsewhere in its evaluation, the Revenue is recommended to increase the size of its ADR team, not least because more applicants are expected when the service is fully introduced later this year.

And while taxpayers cannot insist that their case is handled by the scheme, HMRC says applications are still welcome from small and medium-sized enterprises and individual taxpayers.

Yvette Nunn, president of the Association of Taxation Technicians believes that, so far, ADR is playing “a really helpful part” in resolving “log-jammed disputes” between taxman and taxpayer.

“It is very sensible of HMRC to have avoided accepting too many cases into the ADR pilot,” she said. “We hope that when ADR becomes more widely available that it will help to resolve an increasing number of disputes, thereby reducing the need for litigation and easing pressure on the tribunal system.”

For its part, HMRC claimed that feedback from its customers (including their accountants) “unanimously” showed the Revenue’s ADR 'facilitators' – tax officials who have not been involved in the dispute - to be “impartial and even-handed”.

 

26th April 2013

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