What is Alternative Dispute Resolution?

The benefits of Alternative Dispute Resolutions can include faster resolution as opposed to dealing with the matter in court, greater privacy and flexibility. While there is no guarantee of resolution, 80% of all Alternative Dispute Resolution cases are resolved within 120 days. It is particularly helpful in scenarios where the facts are disputed or there has been prolonged correspondence with HMRC without any meaningful development.

Is Alternative Dispute Resolution for you?

We recommend considering Alternative Dispute Resolution as a route forward in the following circumstances:

• Communication between the taxpayer and HMRC has broken down.
• There is new evidence available that HMRC have not previously fully considered.
• The taxpayer and HMRC can agree on the facts, but not on how those facts are interpreted.
• The taxpayer believes HMRC hasn’t fully understood their position.
• The taxpayer wishes to avoid the costs of litigation.

Please note: Alternative Dispute Resolution is unsuitable for cases with fixed statute penalties which are not subject to negotiation, matters that have already been through the tribunal process, time to pay applications and disputes wholly based on the interpretation of legal matters.

The Alternative Dispute Resolution process

A formal application is made via the HMRC website. This can be made at any stage during a compliance check, except for when the case is being considered at the ‘review stage’.

HMRC’s Alternative Dispute Resolution team will review the case to determine suitability. This can take up to 30 days, depending on case complexity and volume.

HMRC will assess:

• Whether the dispute is appropriate for Alternative Dispute Resolution i.e. whether the matter is based on a difference of fact vs a point of law.
• Whether both parties are open to discussion.
• Whether a meaningful mediation process is likely.

If successful, the case will be allocated to a trained mediator appointed by HMRC to manage the process.

For cases where a tribunal date has already been set, a successful Alternative Dispute Resolution application means the tribunal can pause the case for up to 90 days so the mediation can take place.

HMRC’s annual report suggests that 89% of the cases accepted into Alternative Dispute Resolution were resolved or had a “positive impact”, meaning the case has been progressed, either by fully or partially resolving the dispute, or by clarifying both sides’ positions and enabling them to make an informed decision on how to move forward.

Mediation day for the Alternative Dispute Resolution case

The mediation can take place either online or in person, with ‘break-out’ rooms available to consider strategy throughout the day.

Attendees at the mediation typically include the taxpayer, their representative (i.e. accountant), a trained HMRC mediator and the HMRC case worker. The day starts with the mediator explaining the process and the aims for the day. Each party follows with an opening statement, and then there is a joint discussion of the issues at hand.

The mediator’s focus of the day is to foster a collaborative environment, encouraging open dialogue and communication between HMRC and the taxpayer to help facilitate potential routes to settlement.

Following the mediation, a record of the outcome is produced by the mediator for agreement by both parties.

Speak with our Tax Dispute Resolution specialists

Our Tax Dispute Resolution team has extensive experience with Alternative Dispute Resolution cases.

If an Alternative Dispute Resolution is the next step for you, we can assist with a full review of the position, discuss a range of potential settlement options and help to develop well‑structured arguments to present during the mediation.

We are here to support by streamlining communication between parties and moving the dispute toward resolution.

Alternative Dispute Resolution FAQ's