Content area
Abstract
HM Revenue & Customs' (HMRC) existing Litigation & Settlement Strategy (LSS) recommends litigation where there is better than a 50% chance of success in a tax dispute or full settlement otherwise. Following completion of the Tax Disputes Review towards the end of 2009, HMRC is now considering the LSS in light of the review's recommendations. The primary recommendation is the greater use of Alternative Dispute Resolution (ADR). During the meeting of the Business Tax Forum in December 2009, HMRC indicated they may pilot an ADR programme and would welcome volunteers from business to assist. HMRC believes their recommendations fit within a new overarching strategy placing greater emphasis on dispute resolution but are yet to publish details of a proposed pilot scheme. A small step towards providing the taxpayer with an alternative to immediate litigation rests with the implementation of HMRC's internal review procedure in April 2009. This system of internal review was a new concept for direct tax and replaced the previous non-statutory reconsideration process for VAT. Any appealable decision issued by HMRC now provides the taxpayer with the option of issuing an appeal or requesting a review of the decision within 30 days (section 49B Taxes Management Act (TMA) 1970). This review is carried out by an independent HMRC officer, who was not involved in the original decision who has 45 days to complete the review and issue a further decision that may uphold, cancel or vary the original decision (section 49E TMA 1970). The taxpayer then has the option of issuing an appeal if it disagrees with the decision after completion of the review. Detailed guidance is available in HMRC's Appeals, Reviews and Tribunals Guidance Manual.