Following pilots carried out in 2011, HMRC announced in February 2013 that it would be making a form of ADR available as "business as usual". Since 2 September 2013, HMRC’s ADR service has been available to SME and individual taxpayers where a tax issue is in dispute, whether or not an appealable tax decision or assessment has been made by HMRC.
Whilst ADR is now frequently seen in civil litigation in the English jurisdiction, it has until relatively recently been rare in tax cases, which have tended to be resolved by litigation or by (non-facilitated) agreement.
Rule 3(1) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273) requires the First-tier Tribunal to, where appropriate, bring to the attention of the parties the availability of alternative procedures for resolving their disputes and to facilitate such procedures, providing they are compatible with the overriding objective.
The form of ADR offered by HMRC is effectively a form of mediation. Although HMRC describe the mediator as being an independent person from HMRC (the facilitator), who has not been involved in the case to date, it is perhaps something of a misnomer to describe an employee of one of the parties in dispute as "independent". The intention is that the facilitator will work with the taxpayer and the HMRC case officer to try to broker an agreement.
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