New way to resolve disputes?
Why now? The aim of this scheme is to improve HMRC’s understanding of SME tax disputes so that it can: (1) consider and test alternative ways of resolving such disagreements which have persisted past the formal decision stage; and (2) develop an evidence base that will allow it to improve its processes, guidance and behaviours with a view to minimising the number, scope and impact of avoidable disputes. Well, that’s the theory anyway!
The methodology. The VATman will identify about 250 cases in which he can trial the application of “alternative dispute resolution techniquesâ€. Cases will be selected from those that are currently part of the statutory review process. If agreement is obtained from the taxpayer, the VATman will consent to a limited extension of the review period during which he will seek to work “collaboratively with taxpayers/traders and agents to progress matters and if possible reach a resolution of the tax disputeâ€.
Split it up. Having identified potential cases the VATman proposes to divide these between the following groups:
- those involving an HMRC facilitator from the Appeals and Reviews Unit
- those involving an HMRC facilitator from a Local Compliance SME team.
Tip. The trial will not affect your right of appeal to the tribunal; this will remain as it is.
Positive thinking. If the pilot is a success, the use of a third party facilitator could be extended nationwide and, hopefully, result in more reasoned decision-making from the VATman, fewer tribunal appeals and reduced costs by avoiding litigation. It’s hoped that it will adopt an open and collaborative approach with taxpayers/traders and their advisors. Only time will tell and we’ll be keeping a close eye on the outcome.
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