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HMRC launches alternative dispute resolution service

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HMRC has launched its alternative dispute Resolution service in full from 2 September 2013. This follows a two-year trial, which began in specified regions before being made available nationally in May 2012.

HMRC has launched its alternative dispute Resolution service in full from 2 September 2013. This follows a two-year trial, which began in specified regions before being made available nationally in May 2012. After encouraging results from a two-year trial and consultation, HMRC this week launched an alternative dispute resolution (ADR) service as a way for small businesses and individuals to resolve disputes. The ADR service uses independent HMRC facilitators to resolve disputes between HMRC and customers during a compliance check. ADR aims to find a fair and quick outcome for both parties, helping to reduce their costs and avoid a tribunal, and is available to small business and individual taxpayers where a tax issue is in dispute, whether or not a tax decision or assessment has been made by HMRC that can be appealed.

Announcing the launch of the ADR service for small businesses and individuals, Richard Summersgill, HMRC director of local compliance, said: ‘We know that taxpayers like the speed and flexibility of alternative dispute resolution and evidence has shown that by using this simple service, many disputes can be significantly shortened and resolved without recourse to the tribunal.’

The Association of Taxation Technicians (ATT) welcomed HMRC’s adoption of ADR, with ATT president Yvette Nunn saying: ‘Tax dispute resolution has been in need of reform for far too long and this is, I believe, the shape of things to come. In appropriate circumstances, ADR should provide SME businesses and individuals and their advisers with a cost-efficient and effective way of settling disagreements.

‘The results of the ADR pilot were very encouraging, and we believe that its implementation will play a significant part in helping to resolve log-jammed disputes where neither party is managing to persuade the other of their position. HMRC engaged very positively with professional bodies and the voluntary sector and undertook extensive trials. The end product is one that we are very pleased with. We will be following developments very closely to ensure that ADR lives up to expectations.  

‘During the pilot scheme, ADR has already assisted with the resolution of a significant number of direct and indirect tax disputes. It is good to see that many users have praised its efficiency and speed with two-thirds of applications resulting in a full or partial resolution.’

ADR covers both VAT and direct taxes disputes, and HMRC says that entering into the ADR process will not affect the taxpayer’s existing review and appeal rights. For more information on ADR, including how to apply for the process, visit HMRC’s website.

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