HMRC’s ADR service aims to provide an alternative way of resolving tax disputes by using an independent facilitator, who mediates discussions between the 
business and the HMRC caseworker in an attempt to resolve the dispute.
You can read our earlier blog on the subject here.
ADR can be used before and after HMRC has issued a decision that can be appealed against, and at any stage of an enquiry, including during a compliance check when the business has been unable to reach an agreement with HMRC, or where progress in the enquiry has stalled. At the end of a compliance check, when a decision has been made that can be appealed against. ADR does not affect the taxpayer’s right to appeal, or to ask for a statutory review.
The ADR service may be particularly useful where the facts of a case need to be firmly established, but where communications have broken down between the business and HMRC.
Once an application has been submitted, HMRC will advise within 30 days whether the case can be included in the ADR process. HMRC will then contact the taxpayer, or their representatives, and introduce them to their facilitator who will explain their role in more detail. Customers and their representatives will also be asked to complete an ADR Process Agreement to confirm participation and commitment to ADR.
The facilitator will be an HMRC member of staff who has undergone training in facilitation and has had no prior involvement with the dispute.
ADR does not suit every taxpayer in dispute with HMRC. However, given the possibility of resolving matters for a fraction of the cost and time of taking a case to tribunal, for some, it may be worth trying. According to HMRC’s Annual Report and Accounts 2017-18, some 82% of cases accepted for ADR were fully or partially resolved, and some 94% of taxpayers and their representatives were satisfied/very satisfied with the ADR process.
You can find a copy of the updated ADR fact sheet on the .Gov website.
The Bedrock team has considerable experience of guiding businesses and individuals through HMRC enquiries. You can read more here or why not get in touch to find out how we could help you if you’re ever in this situation.
