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Alternative dispute resolution is a confidential process – is this about to change?

24 May 2022 / Keith M Gordon
Issue: 4841 / Categories: Comment & Analysis
Spot the difference

Key points

  • HMRC’s alternative dispute resolution means mediation rather than arbitration.
  • The mediator will be an HMRC officer unless the taxpayer wishes to appoint a fully independent mediator but the taxpayer will be expected to pick up the tab.
  • HMRC caseworkers sometimes see ADR as a fact-gathering exercise and refuse to countenance any discussion towards a settlement.
  • HMRC now requires taxpayers to agree to it being permitted to use information that is material to a taxpayer’s tax or penalty position.
  • This lack of confidentiality contradicts the purpose of the ADR process.

In my article ‘Better than sliced bread?’ (Taxation 22 October 2015 page 10) I extolled the virtues of the alternative dispute resolution (ADR) process when trying to resolve a dispute between taxpayers and HMRC. Recent developments have somewhat reduced the attractiveness of the ADR process but I would not wish to discourage practitioners from considering it...

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