Wednesday, 4 September 2013

HMRC formally launches the Alternative Dispute Resolution Service, but why do we still need it?

Contractor UK has reported that a scheme designed to help small companies and individuals at loggerheads with the taxman has been upgraded from a trial to standard practise, HM Revenue & Customs said on 3rd September 2013.

Following the two-year trial, HMRC says it has now created the Alternative Dispute Resolution Service a new national team to help resolve tax disputes using the scheme.

Since last June, businesses and individuals in dispute with HMRC have been able to use the ADR to request the involvement of a ‘facilitator’ – an HMRC official unrelated to the dispute - to help both parties understand each other and work towards an agreement.

“Our customers have told us that they like the speed and flexibility of ADR,” Richard Summersgill, HMRC’s director of local compliance, said yesterday. “Evidence has shown that by using the simple ADR service many disputes can be significantly shortened and resolved without recourse to Tribunal.”

The scheme’s expansion was welcomed by The Association of Taxation Technicians, whose members provide accountancy services to business owners, but not unreservedly.

“We will be following developments very closely to ensure that ADR lives up to expectations,” said ATT’s president Yvette Nunn.

Angelina Morlacci of SAIL Business Solutions noted that many disputes with HMRC were down to poorly communicated advice and bad timing. “So many clients have never been told the importance of timely submissions for tax when dealing with HMRC. This is true for clients in work, but equally so when a client’s contract ends. There is still a reporting and administrative burden to fulfil. Finding a good accountancy firm is about getting the basics right, and ultimately having complete peace of mind to avoid these disputes.”