How HMRC resolves civil tax disputes
HMRC's internal governance arrangements for decisions on how tax disputes should be resolved ensure that HMRC deals with all cases in a fair and even-handed manner.
This page sets out how HMRC aims to resolve civil tax disputes and contains information on its internal governance processes.
When customers disagree with us, there are ways to reach a resolution, and there is support available.
This support includes information on how to ask for a statutory review of any tax decision and ways to appeal to an independent tax tribunal.
HMRC’s approach to the resolution of civil tax disputes
The HMRC Charter defines the service and standard of behaviour that customers should expect when interacting with us. Where possible, we support customers to get their tax affairs right without the need for a dispute and most disputes can be resolved collaboratively and by agreement once the facts have been established and the points at issue discussed.
We know there will be occasions where customers disagree with us on the amount of tax that is due. We seek to resolve any dispute as quickly and cost-effectively as possible, in accordance with the law, our Litigation and Settlement Strategy, and our Code of Governance for resolving tax disputes.
HMRC’s Litigation and Settlement Strategy (LSS) is the framework within which HMRC resolves tax disputes through civil law processes and procedures in accordance with the law. The Code of Governance sets out HMRC’s internal governance arrangements for decisions on how tax disputes should be resolved. It ensures all cases are dealt with fairly and in an even-handed manner. Our Charter standard of Treating you Fairly means we’ll assume you’re telling the truth, unless we’ve good reason to think you’re not.
The role of the Tax Assurance Commissioner
The role of the Tax Assurance Commissioner was introduced in 2012, as part of a package of measures to strengthen governance of tax disputes. The Tax Assurance Commissioner has ultimate responsibility for civil disputes governance across HMRC, and for the Litigation and Settlement Strategy (LSS). They provide assurance and transparency, with an explicit role to challenge decision-making in the largest and most sensitive disputes, and a sample of smaller cases.
The Tax Assurance Commissioner has no role in the tax affairs of specific customers and no line management responsibility for caseworkers, maintaining clear separation of responsibilities. The Tax Assurance Commissioner’s Report outlines HMRC’s continuing approach to resolving tax disputes.
Dispute resolution governance and issues boards
HMRC’s civil tax dispute governance boards and issues boards comprise of senior officers from across HMRC, including lawyers and representatives from policy, technical and operational areas, independent of the case team. Further information on HMRC’s case boards and issues boards is available in the Code of Governance.
Extra support
You can get extra support if your health condition or personal circumstances make it difficult when you contact HMRC. Our guidance, communications and letters to customers signposts the extra support HMRC provides.
We have detailed guidance on how to get help from HMRC and the range of support provided, should you need it.
Alternative Dispute Resolution
Alternative Dispute Resolution (ADR) is a flexible dispute resolution tool, which can help HMRC and the customer resolve disputes (or reach key decision points) in a cost effective and efficient manner.
An application for ADR can be made at any stage of an enquiry, and at any stage of the tribunal proceedings, either when an agreement cannot be reached or once HMRC has issued their appealable decision.
Reviews and appeals
Where agreement over a tax dispute is not possible, customers have access to a number of tools to help resolve disputes.
A potentially cost-effective and quick way of resolving a dispute is a statutory review, carried out impartially by an officer who works in HMRC’s Solicitors Office and Legal Services directorate. If the customer disagrees with the outcome of a statutory review, they can appeal to an independent tribunal.
The customer is also entitled to have someone else deal with us on their behalf, such as an accountant, friend or a relative throughout the entire dispute process.
General Anti-Abuse Rule
The purpose of the General Anti-Abuse Rule (GAAR) is to discourage customers from entering into abusive tax arrangements.
The GAAR Advisory Panel is an independent body made up of experts with legal, accountancy and commercial backgrounds. It provides an early opinion on whether tax arrangements are unreasonable.
Accelerated Payment Notices and Follower Notices
Accelerated Payment Notices (APNs) can be issued to users of tax avoidance arrangements in certain circumstances. They ensure that any disputed amounts sit with HMRC until the dispute is resolved, removing the cash-flow benefit obtained by users of avoidance arrangements. Where HMRC has successfully challenged avoidance arrangements in court, Follower Notices (FNs) can be issued to users of the same or substantially similar arrangements, requiring them to settle their affairs or risk a penalty.
APNs or FNs can only be issued with the approval of the Workflow Governance Group (WFGG). WFGG is comprised of senior representatives from relevant operational, technical, policy and legal areas of HMRC. Submissions are made to WFGG on a scheme basis, including anonymised information about scheme users. WFGG examines submissions to confirm that the statutory and policy criteria for issue are met. WFGG may reject submissions or request further information before making any decision to issue APNs or FNs. No decision to issue APNs or FNs can be taken without at least one person of Senior Civil Servant (SCS) grade being present.
There is no right of appeal against either APNs or FNs, but the legislation allows for representations to be made which HMRC must consider. Representations are reviewed by independent teams within HMRC Solicitors Office who have no direct involvement with the relevant tax disputes. Where penalties are incurred for non-compliance with APNs or FNs, these carry a right of appeal to the Tax Tribunal.
High Risk Corporates Programme
The High Risk Corporates Programme (HRCP) is a cross-HMRC initiative that aims to reach accelerated resolution on some of HMRC’s largest and most complex tax risks, and simultaneously reduce future risk by influencing customers to change their behaviour and approach to tax planning. The HRCP aims to improve the relationship between both HMRC and its largest corporate customers, and HMRC’s capability to deal with the largest and most complex tax risks.
Additional information
Updates to this page
Last updated 12 September 2024 + show all updates
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Added HMRC Contentious Issues Panel – Terms of reference to the Dispute resolution governance boards section.
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Added 'Dispute resolution governance board remits' to 'Dispute resolution governance boards' section.
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First published.