Alternative Dispute Resolution services

Alternative Dispute Resolution (ADR) is a formal mediation process for tax disputes that can often help accelerate a resolution with HMRC. When a case is accepted for ADR, an HMRC mediator is appointed to manage the process for both sides. HMRC’s ADR process is open to all taxpayers and is used to resolve both personal and corporate tax disputes.

In our experience, ADR is invariably a cost-effective way to find a satisfactory resolution to your tax dispute.

There are all sorts of reasons why a tax dispute with HMRC can become difficult to resolve; the facts are misunderstood, evidence is incomplete or there is a breakdown in communication. This can lead to stressful and disruptive disputes that take up disproportionate amounts of time and resource.

ADR is particularly useful for cases that have been on-going for at least 18 months. While there is no guarantee of resolution, 80% of all ADR cases are resolved within 120 days.

The process of applying for ADR requires a formal application via the HMRC website. This is then subject to a triage process by HMRC before it is allocated to a mediator. There is then engagement with the mediator who liaises with the HMRC case team. Sometimes there are joint mediators appointed, to include a member of our team.

Once the case is admitted into the ADR process the mediator liaises with both sides to obtain their respective opening statement in advance of the formal mediation meeting. There can be an exchange of further documents or information in advance of the mediation day.

The formal mediation is conducted either in person or remotely with separate “rooms” for each side to regroup and consider their position.

As part of the ADR application process, the client, once the process commences, is required to commit to it.

If formal ADR is ruled out, for example if Judicial Review proceedings have commenced, there is an alternative, less formal route which you may wish to consider. We can organise facilitated conversations with HMRC to help move your dispute towards resolution. Again, our accredited mediators with their practical knowledge of LSS will support you throughout the process.

BDO Tax ADR Mediate is our tax mediation support service that supports you through the Alternative Dispute Resolution process to accelerate the resolution of your long-running or stalled tax dispute with HMRC.

The service is delivered by our team of experienced and accredited mediators. We have extensive knowledge and understanding of both HMRC’s ADR process and Litigation and Settlement Strategy with guides HMRC’s approach to resolving tax disputes. In fact, we have been involved in the evolution of HMRC’s ADR since the earliest pilots more than a decade ago.

We will support you and your professional advisors through the process from initial application right through to finding a solution with HMRC.

Review and approaching HMRC

We will start by reviewing your case and the history of your dispute with HMRC. We want to make sure that you will benefit from using HMRC’s ADR process. If that is the case, we will explain and explore the use of joint mediators with you.

The next step is for us to approach HMRC informally to raise the possibility of using the ADR process. We will use this opportunity to set the right tone for the process. We will then make the formal ADR application on your behalf

Preparation, planning and coaching

We want you to be as well-prepared as possible for the mediation process. We will help you design a strategy for getting the right outcome from the mediation. This can include calling on the expertise of technical tax specialists to strengthen your technical position. We will then coach you and your team on the mediation process and how to manage it.

Advocacy and negotiation

We will present your case to HMRC during the mediation. We will advocate and negotiate on your behalf using our expertise and our experience. As part of the negotiations, we will draft a settlement proposal that is compliant with HMRC’s LSS and, more importantly, results in the best outcome for you. We can also host the mediation.

Conclusion of settlement

We will also outline and explain the costs of a proposed settlement so that you can make an informed final decision. Finally, once a settlement is reached, we will handle all the formal paperwork until the case is closed.