HMRC pilots scheme to resolve SME tax disputes more easily

Tax disputes between small and medium-sized business and HM Revenue & Customs (HMRC) could be soon be resolved more quickly and easily following the introduction of a pilot dispute resolution process for SMEs.

The Alternative Dispute Resolution (ADR), which is being piloted in North Wales and the North-west, will employ independent HMRC facilitators to resolve difficult disputes between businesses and HMRC in the hope of avoiding costly tribunals.

The ADR will attempt to catch and solve disputes during a compliance check. The pilot in North Wales and the North-west follows a successful trial earlier this year, where 60% of disputes were either fully or partially resolved.

HMRC's, Jim Stevenson, 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."

ADR does not affect existing processes or review and appeal rights, and covers both VAT and direct taxes.

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By Neil Gerrard

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