How to Start the HMRC Alternative Dispute Resolution Process: A Step-by-Step Guide
Posted: 5th November 2024
For individual taxpayers and businesses, Alternative Dispute Resolution (ADR) can be an effective means for resolving HMRC enquiries and compliance checks. Instead of resorting to tax litigation and court proceedings, ADR can provide a fair way to end your dispute through mediation.
If you’re thinking about moving forward with ADR, it’s a good idea to familiarise yourself with the process. So in this practical guide, we’ll walk you through the key steps to starting Alternative Dispute Resolution, helping you move forward with your case.
Determine If ADR is Right for Your Dispute
ADR is becoming an increasingly successful method of resolving disputes, but it isn’t an effective approach for everyone. It’s therefore essential to make sure Alternative Dispute Resolution is a suitable option for you before you begin the process.
You’ll first need to ensure your case is eligible for ADR. There are certain types of disputes that are eligible, including:
· Tax assessment disagreements
· Compliance issues
· VAT disputes
· R&D compliance checks
There are also common criteria that make a dispute suitable for ADR, such as when the disagreement is about facts rather than legal principles.
To assess whether Alternative Dispute Resolution is the best option, you’ll need to consider the complexity of your case, and whether a more formal route like a tax litigation may be necessary. You should also think about which process may be cheaper and quicker, which you would find less stressful, and what the outcome may be.
If you’re unsure whether ADR is the right choice, be sure to seek the advice of a professional, who will be able to determine the best resolution method for you.
Preparing for the ADR Process
Preparation is crucial to a successful Alternative Dispute Resolution process. You should detail all the documentation and information you need, such as copies of tax returns, correspondence with HMRC, and details of the dispute. It’s also important to have an awareness and understanding of both sides of the disagreement to prepare for productive discussions.
We’d recommend gathering your documents chronologically so you don’t miss out on anything important. You can also seek guidance from a tax specialist, who will help you organise and review evidence that supports your case, and ensure all the necessary documents and arguments are completed before you submit your request.
Submitting Your ADR Request and What to Expect
To formally submit an ADR request to HMRC, you’ll need to complete GOV.UK’s online form. If you have a tax adviser or agent, they can apply on your behalf.
This Alternative Dispute Resolution application details the principles you’ll need to abide by during the process. This includes:
- Agreeing to provide more information if asked for it
- Responding to any requests from HMRC within 15 working days
- Committing to attending a meeting by telephone, video or face-to-face
Once you’ve submitted your request, HMRC’s ADR team will contact you to discuss the application in more detail. They’ll then consider your case, and decide whether Alternative Dispute Resolution is an effective means forward. HMRC will usually confirm if the case has been accepted within 30 days of receiving the application, and will appoint a suitable mediator/facilitator.
Your facilitator will typically conduct a meeting within 90 days of your acceptance. Together you’ll establish ground rules, confidentiality agreements and your meeting timetable. The mediation process usually takes around 4 – 6 weeks, but this can be quicker if both parties are cooperative.
To ensure discussions are as proactive as possible, the facilitator will listen to both parties, reestablish communication if necessary, and focus on the areas that need to be resolved.
Be sure to conduct yourself professionally throughout the process. By communicating effectively, being open to compromise and sticking to the key issue, you will maximise the chances of a favourable resolution.
Navigating ADR With Confidence
For those who don’t want to resort to tax litigation, Alternative Dispute Resolution can be a cost-effective and time-saving way to resolve disputes with HMRC. To tackle this process efficiently, you should assess your suitability, ensure you’ve adequately prepared, and then submit your request. While there’s no guarantee of success, you’ll be in the best position possible to navigate your case and work towards resolution.
For smooth, expert help with the ADR process, be sure to reach out to our team at NHD Tax Solutions.
