Following a pilot that was launched in January 2012, HMRC have received over 400 applications from individuals and small and medium enterprises (SMEs) to use the Revenue's Alternative Dispute Resolution (ADR) service. Such has been its success that HMRC has decided to move ADR for this category of taxpayers into 'business as usual' from April 2013.
ADR is a different way of settling tax disputes and involves calling in an independent person from HMRC, called a 'facilitator', who has not been involved in the dispute before. The facilitators are specially trained officers who attempt to broker discussions with the taxpayer and the Revenue caseworker.
ADR covers both VAT and direct taxes disputes, and opting into the ADR process does not affect a taxpayer's existing review and appeal rights.
According to HMRC, ADR has proven to be a quick and effective method of resolving disputes in a speedy and efficient way, not only for tax but in the commercial world as well.
HMRC’s Richard Summersgill, Director of Local Compliance, said: “ADR has shown that many disputes, where an impasse has been reached, can be resolved quickly without having to go to tribunal. ADR is a fair and even-handed way of resolving tax disputes between HMRC and its customers and helps save time and costs for everyone. We have had good feedback from both SMEs and individual customers and are grateful to the professional bodies and the wider agent community for their assistance and support during the pilot stages. It allows us to work together with our customers and resolve disputes much earlier than at present.”