From 2 September 2013 alternative dispute resolution (ADR) is now available to small and medium enterprises (SMEs) and individuals.  If a taxpayer that is in dispute with HMRC asks for ADR a facilitator will be appointed from within HMRC. The facilitator will be a person who is independent of the tax inspector dealing with the case. The facilitator’s task will be to broker an agreement between the taxpayer and the inspector.  The taxpayer would not give up any other rights of appeal when entering the ADR process.

An application for ADR may be made online through HMRC’s website. A decision on permitting the taxpayer to use the ADR will be communicated to the taxpayer within 30 days. HMRC suggests that suitable cases for ADR may be those where the facts are known but are capable of further clarification; cases where more suitable evidence could be obtained; factual or technical matters where there is scope for the parties to better understand each other’s arguments; or issues that can be mediated and settled within the framework of HMRC’s litigation and settlements strategy.

Cases would not be considered suitable for ADR if HMRC considers that the case has to go to litigation; if there are issues that require clarification in the public interest; if issues are linked to coordinated appeals; or in cases that HMRC could only resolve if it did not conform to its usual technical or policy standpoint. If a case is to be heard by a Tribunal it would not be suitable to take the case to ADR within 20 days of the date of the Statement of Case in the Tribunal procedure.