The backlog of disputes between HMRC and taxpayers has hit record highs this year, with the number of outstanding tax tribunal cases doubling in four years, according to law firm Pinsent Masons. There were 26,965 outstanding First-tier Tribunal cases in 2012/13, up from 24,273 the previous year. This is compared to 13,456 in 2009/10.
Jason Collins, head of tax at Pinsent Masons, said: ‘These figures show that there is a huge backlog of tax disputes still building up between HMRC and taxpayers, which is costing businesses and individuals dear – both in terms of time and money – while they remain unresolved.’
In response, a spokesman for HMRC told Tax Journal: ‘There is no backlog. Lots of cases are linked and since the majority of tribunal decisions go our way, cases clear automatically once decisions are given in our favour.
‘We would much prefer to settle disputes by agreement without the need to go to tribunal, but we will settle only for the correct amount of tax due according to the law. We win 70% of all cases which go to tribunal. We do offer a neutral and informal method for settling disputes under our very successful alternative dispute resolution (ADR) process,’ HMRC added.
Collins acknowledged that ADR is ‘a very positive move’, but said that it was not going to solve everything. ‘HMRC itself needs to be far more willing than it currently is to instigate constructive negotiations with taxpayers with a view to achieving sensible settlements. It still has a long way to go to establish workable ways to recoup tax without entering into so much costly legal wrangling’.
