Decline in use of alternative dispute resolution

Taxpayers’ use of mediation to settle tax disputes in the past year has declined with the number of cases falling 25% from 553 in 2017-18 to 417 in 2018-19 according to data obtained from HMRC by RPC.

The law firm believes this is because HMRC often refuses to mediate. Requests to use mediation fell 19% from 1 411 in 2017-18 to 1 144 in 2018-19 which is forcing cases into litigation through the tax tribunal system.

Robert Waterson partner in the tax disputes practice at RPC said HMRC refuses requests for mediation from taxpayers who have filed an appeal with the tax tribunal if HMRC has provided a statement of case. Without this information it is difficult for a taxpayer to know what HMRC’s position is and prepare for alternative dispute resolution.

Only £45m in additional tax was brought in by the department through alternative dispute resolution in...