Two thirds of HMRC tax dispute settlements below standard

Almost two thirds (64%) of tax dispute settlements made by HMRC reviewed as part of its tax settlement assurance programme fell below its own quality standards with 10% having a financially detriment effect on taxpayers according to HMRC’s 2020-21 annual report and accounts.

Pinsent Masons says these standards are intended to ensure that HMRC follows its own agreed processes in negotiating settlements. However where failings are found in those reviews this does not result in a dispute being reopened even if a taxpayer has been treated unfairly and has been financially affected.

The annual report stated that of the 401 tax dispute settlements reviewed by HMRC in the past year 40 fell short of the department’s internal quality and governance standards while also having a financial impact on the taxpayer.

Part of HMRC’s internal quality standards for settlement cases include ensuring a clear...