ATT responses to HMRC consultation on improving HMRC’s approach to dispute resolution

The Consultation was seeking views on options for simplifying, modernising and reforming HMRC’s approach to dispute resolution. It focused on the ease of access and use of HMRC’s alternative dispute resolution (ADR) and statutory review processes.

In the ATT's response, we made the following comments in relation to the three areas being considered:

Reforms to improve support and guidance for customers going through a compliance intervention

We support the need for enhanced guidance on compliance interventions and the appeals process, particularly to ensure that all taxpayers (especially those who are unrepresented) are aware of how and where to access appeal processes during a compliance case. We also agree that, if implemented effectively, a digital appeals route has the potential to offer a more efficient and streamlined method for resolving disputes and maintaining engagement with HMRC. However, it is essential that alternative, non-digital options remain available to ensure accessibility for those who are digitally excluded and for these to be clearly signposted.

Simplifying and aligning processes

We support the alignment of appeal processes across direct and indirect taxes. However, we have concerns regarding the current proposal in which the issuance of an informal pre-decision letter is not mandatory. If left to HMRC’s discretion, the absence of such a letter could reduce opportunities to resolve disputes at an early stage, potentially leading to unnecessary progression into the formal appeals process.

Reforms to improve access to alternative dispute resolution

We support the inclusion of all appropriate areas within the scope of ADR and believe that access to the process should be simple and straightforward. However, we do not agree with the introduction of a charge for the use of ADR. We believe ADR should remain free at the point of access, as it plays a vital role in promoting fair, proportionate, and accessible tax administration. Introducing a fee risk undermining the effectiveness and equity of the process.