Improving the time and resources expended on disputes between government and businesses
Dates: 2011 - on-going
“Alternative dispute resolution can help maximise the cash flow to the exchequer; make the most effective use of our resources; and improve the customer experience. It ticks all the corners of that ‘virtuous triangle’.”
Val Hennelly, Head of the Dispute Resolution Unit at HMRC,
CEDR is part of an initiative that has created an ideas ‘Hub’, a leadership forum for discussion, review, development and innovation of collaborative working tools and techniques to help guide policy and practice in tax matters.
In 2012 CEDR began hosting the Hub, where ADR Tax practitioners and their HMRC counter-parts can safely explore methodology and opportunities for effective collaborative working in resolving tax disputes. This facility allows users to start debates and add to existing discussions, thus expanding knowledge and expertise in this field.
Why the need for ADR in Tax disputes?
HMRC are keen to resolve disputes through agreement, for whilst less than 1% of all the disputes that they deal with go to the tribunal stage, it still puts pressure on the resources of both sides to manage this 1%. HMRC over the course of a year receives 8000 cases. Each of these cases drains resources in regards to time, money and energy. The processes employed previously to find a resolution in these tax disputes have been found to reduce the customer’s satisfaction, and importantly slow down the cash flow to the exchequer, whilst also being costly in themselves.
Most disputes regarding tax are settled in negotiation anyway. Mediation is effective as it maintains this basic process whilst providing it with more of a structured framework within which to operate. Adding the third party neutral to act as the process manager means the parties can concentrate on the content of the dispute and core issues. The mediator can also ask the difficult questions and inject an amount of dynamism into standard bi-lateral negotiations.
The pilot schemes run by HMRC have shown that there is an alternate and effective way to resolve these issues. In 2011, after receiving positive feedback from users and staff who trialled the use of mediation in tax disputes with small to medium businesses in North Wales and the North West of England, HMRC have decided to roll the scheme out on a bigger scale.
CEDR has trained 24 tax professionals in mediation and conflict management skills to be able to act as neutral parties and facilitate the resolution of disputes regarding tax between HMRC and businesses.
Why a Hub?
Graham Massie, CEDR Director of Consultancy, participated in roundtable discussions with Val Hennelly, Head of the Dispute Resolution Unit at HMRC, Jonathan Levy, Head of RPC (Reynolds Porter Chamberlain) Tax Dispute Group and Geoff Lloyd, Executive Director of Ernst & Young’s Tax Controversy and Risk Management Practice, offering expertise to help guide ADR Tax Professionals in the setting up and delivery of a tax dispute resolution centre.
This Hub aims to make the most effective use of the available resources, and help experts in the field to analyse and improve the customers experience in tax controversies.
To visit the ADR Tax Hub please follow this link