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Alternative Dispute Resolution

Traditionally, tax investigations are resolved either by reference to a negotiated civil settlement or by litigation via the Tax Tribunals. However, HMRC recognises mediation as an effective approach to resolving disputes between parties.

Any decision by HMRC to settle a case by mediation will still be governed by the terms of HMRC’s Litigation and Settlement Strategy , which sets out HMRC’s overall approach to resolving tax disputes through civil procedures.

Alternative Dispute Resolution (ADR) is now fully embedded in HMRC’s approach to resolving tax disputes.

Potential benefits of mediation

During mediation:

  • both parties retain ownership of the decision and can withdraw from the mediation process at any time
  • parties can begin or resume negotiations when direct negotiations are at an impasse
  • a third party presence automatically changes the dynamics of a dispute and brings a fresh perspective
  • a mediator can change the focus from the past to the present and future
  • a new focus on the timetable can inject urgency into decision making
  • even if there is no settlement, mediation can enable a better understanding of why litigation is the appropriate way to resolve the dispute and help both parties better prepare for litigation
  • there is little ‘downside’ to the process as all work and preparation involved is likely to be of direct relevance and use to litigation in the event of an unsuccessful mediation

Why you should contact us

Our team of former tax inspectors have a significant amount of experience in resolving tax disputes and can help you to explore whether ADR could assist you.

For more information or help from one of our tax investigation specialists, please contact us using our enquiry form.