SME tax disputes

Small businesses will be able to settle tax disputes with HM Revenue & Customs (HMRC) without having to go to a tribunal, under new plans unveiled today.

HMRC has launched a pilot scheme called Alternative Dispute Resolution (ADR) aimed at small and medium-sized enterprises (SMEs) which will allow them to resolve any tax issues resulting from an HMRC compliance check before a decision or assessment has been made.

Jim Stevenson, HMRC 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.

‘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. The aim is to resolve the dispute or, if not, as many issues as possible.’

The pilot is taking place in North Wales and the North West following an earlier trial where 60% of disputes were either fully or partially resolved.

Andrew Gotch, chairman of the Chartered Institute of Taxation’s owner managed business sub-committee welcomed the move.

‘ADR has the potential to be a valuable Gordian knot-cutter in investigations and technical disputes that have run into the sand. Anything which can help resolve disputes between HMRC and taxpayers to mutual satisfaction without the need to resort to expensive and time-consuming litigation has to be good news for all sides.’