HMRC launches alternative disputes pilot scheme this week

News Article - 11 January 2012
Category: Business

The taxman has this week launched an alternative disputes pilot scheme across the North West and North Wales, which will allow independent HMRC facilitators to resolve disputes regarding HMRC's compliance checks for small and medium-sized enterprises (SMEs).

The idea behind this scheme is to avoid unnecessary tribunal hearings and reduce costs for both parties.

Last year, a similar pilot was trialled with the aim of dealing with cases heading towards a tax tribunal. HMRC insisted that particular scheme was a success with 60 per cent of these disputes either fully or partially resolved.

Both the taxman and SMEs have admitted to communication breakdowns as the cause of compliance issues in the past and this pilot is set to bridge the gap according to Jim Stevenson, assistant director of local compliance at HMRC.

"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," he said.

"They will also ensure there is good communication, and help explain what each side is trying to say to the other. The aim is to resolve the dispute or, if not, as many issues as possible."

Nevertheless, John Cassidy, tax investigations partner at PKF, warns that SMEs will be keen to receive guarantees that HMRC facilitators are entirely independent to ensure a fair hearing at all times.

He said: "SMEs will need to be reassured that a procedure reliant upon an HMRC facilitator is genuinely independent - bosses will shun the ADR unless they believe that they'll get a fair hearing from the taxman.

"Entrepreneurs may also point out that the Treasury is asking them to make a leap of faith that it is not prepared to make itself - why can't the resolution procedure be mediated by the SME's tax advisers, provided that they are a reputable practice?"

Article keywords: hmrc, sme

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