Tax Dispute Resolution

If an individual is having any query related to the decision of tax, a person can address his concern to HM Revenue and Customs. A piece of advice can be taken by a professional is also available to an individual which is best suited in the circumstances where the decision pertaining to tax is not understood. Thanks to HMRC as it enabled this service. A letter of decision will be sent by HMRC where an appeal can be made. The appeal will be in regards to challenging decision concerning tax. An appeal can be made in regards to the bill of tax, claim required for relief of tax, if an information is required to verify records of business, a fine which is generally applicable in case of late payment in regards to tax or filing of return of tax is done late.

An appeal is not necessarily required to be made by a person himself as it can be dealt by a person who is involved in making tax payment on your behalf. The own costs are required to be borne by you if a decision of tax is challenged. A fine or penalty in regards to tax can be deferred until the time the verdict comes.

What is HMRC accountable for?

HMRC can be made accountable for the amount of tax you owe by canceling it, if they do not proceed forward in case a person, his paymaster, Department for Work and Pensions enticed them.

One can proceed as follows if he owes tax pertaining to income tax, capital gain, national insurance contributions pertaining to the category of Class 4.

What is ADR and how does it help?

A mechanism of resolving the dispute of tax can be through ADR. It is also known as Alternative Dispute Resolution with special emphasis on HM Revenue and Customs. The disputes pertaining to tax are resolved through ADR. It also helps an agreement to proceed which is based on the issues as they lay the foundation for legal proceedings. ADR can’t supersede statutory review or right to appeal.

Who can avail benefits of ADR

ADR can be applied only when there is no scope of improvement in the dealings with HMRC. For instance, it can happen in case of compliance check.

Attributes of ADR

ADR gives you the liberty to appoint mediator. A mediator in this case is generally a person who is unrelated to the dispute and tries to settle the issues between an individual and concerned HMRC officer. He is a third party person and acts as a mediator. He is not in favor of anyone as he is neutral. The dispute’s responsibility is not taken over by them. The ways through which mediator address concerns are conversations through telephone as well as meetings. They help to resolve focal points between the concerned parties and are not hesitant to establish communication between the two, if need arises.

It is decided with mutual consent between both the parties that they will agree to pay to the mediator who is working in a professional capacity.

ADR is not sufficient as to keep legal rights in place, one need to appeal or can go for the statutory review. A point worth to be noted here is ADR needs to be taken before the decision of HMRC. It mainly helps business customers who are facing difficult times due to disputes. As far as disputes pertaining to personal tax are concerned, it can do the needful. ADR can be considered by HMRC if you, tax consultant as well as accountants persist. The review time may be curtailed which is possible due to ADR.

ADR is helpful when

• When there is a difference in opinion of HMRC and person
• Interaction between HMRC and you stopped
• Why HMRC is not giving weight age to the evidence provided by you and why HMRC prefers other evidence
• HMRC need not be accountable to the person concerned if more evidence are required
• The extent of information used by HMRC is not clear to you and to what extent wrong assumptions are made by it in lieu of it

Disputes that fall out of the jurisdiction of ADR

• Surcharges of default nature HMRC in
• Credits pertaining to tax
• PAYE coding
• Cases dealt by HMRC investigators
• Delays in information usage by HMRC

How to take help of ADR

When HMRC CRM or a person who is wholly required to work as a coworker especially in case of business which is large will be the first point of contact to discuss ADR

As far as small and the medium scale of business is concerned, an online form can be filled so that HMRC can get the detail. It is also applicable in case of affairs of personal tax which are complex.

To know the status whether ADR is right or wrong, HMRC brings the status of the same within 30 days. If ADR is taking care of the dispute, Memorandum of Understanding comes into place which refers to the conditions of an agreement besides listing the process. It also ensures agreement to take place. If the terms and conditions of an agreement are not adhered, HMRC is authorized to remove the dispute.

If a person concerned does not get the desired verdict through HMRC

HMRC’s verdict can be challenged and independent tribunal can be referred for the hearing. The statutory review can also be used

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.