A pilot project introducing a new way of resolving disputes between small and medium sized enterprises (SMEs) and HM Revenue & Customs (HMRC) on both VAT and direct taxes was launched today (9 January).

The Alternative Dispute Resolution (ADR) uses independent HMRC facilitators to resolve disputes between HMRC and customers during a compliance check but before a decision or assessment has been made.

ADR aims to find a fair and quick outcome for both parties, helping to reduce costs and avoid a tribunal.

The pilot in is North Wales and the North West and follows a trial last year where 60% of disputes were either fully or partially resolved using this system.

HMRC’s Jim Stevenson, Assistant Director of Local Compliance, said: “It is a good opportunity for HMRC to work together with our customers to potentially resolve disputes much earlier than at present.

“The facilitators are HMRC members of staff who have been trained in ADR techniques and have not been involved in the dispute.

“We have found that often there are communication problems. So the HMRC facilitator will help all parties reach a shared and full understanding of the disputed facts and arguments. They will also ensure there is good communication and help explain what each side is trying to say to the other. The aim is to resolve the dispute or, if not, as many issues as possible.”

ADR does not affect existing processes or review and appeal rights.

For more information you can download a PDF about the scheme by clicking on the website address below.