Guidance

Tax Disputes Resolution Board remit

Updated 12 September 2024

Part 1 – Remit and procedures

Introduction

1.The Tax Disputes Resolution Board (TDRB) has been authorised by the Commissioners for Revenue and Customs to fulfil the following roles:

• making decisions and recommendations, or providing advice about proposals for resolving significant tax disputes
• serving as the escalation point for cases referred from the Customer Compliance Group Disputes Resolution Board (CCG DRB) (see paragraph 10 below)
• providing recommendations to the Commissioners in respect of potential breaches of the Code of Practice on Taxation for Banks
• making decisions and recommendations regarding the application of the large business special measures regime

2.The remit of the TDRB extends to significant tax disputes to be resolved by civil procedures, in any business area.

Operational principles of the TDRB

3.The following principles should underpin the operation of the TDRB:

• HMRC should have strong governance processes, proportionate to risk, which provide assurance to the department’s stakeholders, staff and customers that decision-making in significant tax disputes is robust and even‑handed, in accordance with the Litigation and Settlement Strategy (LSS)

• HMRC’s tax professionals should be able to understand and consistently apply those governance processes

• HMRC’s tax professionals are empowered to play the fullest part possible in the progression and resolution of significant tax disputes and feel their work is supported by the TDRB and other HMRC governance boards

• HMRC’s governance processes should be proportionate, effective and efficient and should not adversely impact compliance delivery and customer experience

The remit of the TDRB

Trigger points for referral to Commissioners via the TDRB

4.‘£100 million cases’: The TDRB shall make recommendations to the Commissioners about the resolution of any dispute in a case where the tax under consideration in the case (considered as a whole) is at least £100 million.

5.‘£500 million adjustments’: The TDRB shall make recommendations to the Commissioners about the resolution of any dispute on a risk where the maximum potential adjustment is at least £500 million.

6.‘Additional Assurance cases’: The TDRB shall make recommendations to the Commissioners on the resolution of any dispute in a case which has been identified as appropriate for additional assurance.

7.‘Banking Code breaches’: The TDRB shall make referrals to the Commissioners, for the Commissioners to decide on whether a bank is in non-compliance with its obligations under the Code of Practice on Taxation for Banks.

8.‘Large business special measures regime’: The TDRB shall make referrals to the Commissioners for decisions on whether to publish details of customers who are subject to a confirmed Special Measures notice.

Trigger points for referral to the TDRB where automatic onward referral to Commissioners isn’t required

9.‘Cases involving unusual or novel features’: Subject to paragraphs 4 to 8 above, the TDRB may make decisions about the resolution of any dispute in a case which is referred to it on the grounds that the case involves unusual or novel features. The TDRB may choose to make recommendations to the Commissioners for the resolution of any such dispute.

10.‘Referrals from CCG DRB’: The TDRB may make decisions about the resolution of any dispute in a case that has been referred to it by the CCG DRB. The TDRB may choose to make recommendations to the Commissioners for the resolution of any such dispute.

11.‘Director referrals’: Where a dispute does not fall within paragraphs 4 to 8 of the TDRB remit but the Director with operational accountability for a case considers that the nature of the dispute renders it necessary or prudent for a referral to be made to the TDRB, the TDRB may make decisions about the resolution of the dispute. The TDRB may choose to make recommendations to the Commissioners for the resolution of any such dispute.

12.‘Large business special measures regime’: The TDRB will be responsible for making recommendations to the Designated Officer regarding the issue of warning notices and Special Measures notices. The TDRB will decide whether there is a ‘loss of a reasonable care defence’ for penalty purposes (Schedule 24 to FA 2007 – penalties for errors) when a Special Measures notice is in place.

Decisions to resolve disputes or risks to be unanimous

13.Any decision of the TDRB in relation to the resolution of a dispute in a case or risk shall be made unanimously by all present at the relevant meeting of the TDRB. Where the TDRB cannot reach a unanimous decision the TDRB shall refer the case or risk to the Commissioners or, where appropriate, request that further work is undertaken by the case team.

Circumstances where referrals do not need to be made to the TDRB

14.For binary issues, or issues where there are a number of discrete options, if a customer proposes to agree the largest amount of adjustment on a risk and pay the largest amount of the tax together with any associated interest and/or penalty as determined by HMRC, the decision to accept the customer’s proposal does not need to be referred to the TDRB, unless that proposal also forms part of a wider proposal to resolve other risks.

15.A decision on how to resolve a dispute that comes within paragraph 4 of this remit does not need to be referred to the TDRB if all of the following apply:

• the decision relates to a risk where the tax under consideration is less than £15 million and the amount of the maximum potential adjustment is less than £100 million
• the proposal for the risk is not related to discussions concerning the resolution of other risks in the case
• there is full agreement between all relevant HMRC stakeholders
• the resolution of the particular risk is in line with any strategy agreed by the Contentious Issues Panel or Anti-Avoidance Board
• there are no unusual or novel features
• the case has not been identified as requiring additional assurance
• the risk is not in litigation and does not impact on litigation in other cases

16.Where the Commissioners have been sighted on an existing handling strategy set by the Contentious Issues Panel, the Anti-Avoidance Board, or otherwise approved by the Commissioners, and the risk is on all fours with that strategy, the risk does not need to be referred to the TDRB for approval provided this approach is agreed by the Deputy Director with operational accountability for the risk.

17.Where the risk relates to VAT Supply Chain Fraud, a referral to the TDRB is not necessary providing that there are no unusual features and that the VAT Serious Non Compliance and Fraud Team agree that the Kittel, Mecsek, or Ablessio cases apply.

18.Where the risk relates to Bank Levy, a referral to the TDRB is not necessary if the dispute would only be within the remit under paragraph 5 (maximum potential adjustment greater than £500 million).

19.Where the risk is part of a project, and at least one case within the project meets one of the criteria within paragraphs 4 or 5:

• the first case in the project to be settled after it is identified that the conditions within this paragraph apply, regardless of the amount of tax under consideration in that individual risk, will require referral to the TDRB (even where the case would otherwise fall within the remit of CCG DRB), and the TDRB will make recommendation to Commissioners about the resolution of the dispute

• identical risks thereafter will not require referral to the TDRB or CCG DRB providing that the Deputy Director with operational responsibility for the risk agrees it is on all fours with the previous case considered by Commissioners

20.Decisions on Judicial Reviews (JR) for risks which are within the governance remit only need to be referred to TDRB and the Commissioners where they are tax related claims for JR brought by a customer to resolve a specific tax dispute and HMRC is considering not defending the JR.

21.Exceptionally, the Director with operational accountability for the case may consider that the TDRB’s principles are best delivered without reference to the Commissioners for a decision. In such a case the Director should keep a record (copied to the TDRB secretariat) of the circumstances and, as required, be ready to explain to the Commissioners’ satisfaction why a referral was not necessary.

Part 2 – Definitions

22.‘Dispute’ is defined as including all areas of non-agreement between HMRC and a customer or their agent over a substantive tax liability, where that non-agreement has been raised through:

• an enquiry from either side, including a dispute in relation to pre-transaction or pre-return clearances work
• a challenge made by HMRC to a customer
• a challenge made to HMRC by a customer where HMRC has decided to take up or respond to the challenge

23.This means that in relation to disputes subject to civil law procedures, the definition covers compliance activity from start to finish.

24.A dispute would not normally cover risk assessment work including situations where customers are asked to provide information before an evaluation can be made of the extent of any risk to HMRC (typically, for example, where an analysis of items in the accounts are requested).

25.‘Risk’ means a particular transaction (or series of transactions) or an item in a return or declaration which causes risk to past, or present or future revenue flows.

26.A ‘case’ is the sum total of all of the risks that are not finally concluded (up to a decision on appeal at the First-tier Tribunal) at any one time in relation to a particular business (which, for the avoidance of doubt, includes all of its group associates) or individual or other entity. It does not matter in which part of HMRC a risk is being dealt with as all risks are aggregated for the purpose of determining the value of a case. Where there is only one risk in relation to a particular customer that single risk will constitute the whole case.

27.‘Tax under consideration’ is the amount of tax or duty attributable to a dispute on a risk after taking into account the impact of losses or other reliefs. It is calculated without regard to the strength of the arguments or the prospects of success and is the amount that would arise if the risk were conceded in full to HMRC. It should include any penalty which, in HMRC’s view, is potentially payable.

28.It should also include, where appropriate, the Future Revenue Benefit (FRB) that might arise if the risk were resolved in HMRC’s favour. Again account must be taken of the impact of losses and other reliefs. Any FRB calculations must be sensible and realistic and any assumptions about levels of profitability and behavioural shift must be evidence-based. FRB projections should not extend longer than five years. Tax under consideration should be measured at the point of referral. However, where there has been a re-evaluation or recent closure of a risk, the advice of the TDRB Secretariat should be sought if as a consequence of those changes a case falls outside the remit of the TDRB.

29.Whilst interest is not normally included in the calculation of tax under consideration, it should be taken into account where it is a significant factor in the evaluation of the overall amount at risk to HMRC. Typically this would involve enquiries or claims to repayment extending back over earlier years. Where interest is itself a significant element within any dispute it may be appropriate to refer to the TDRB. The advice of the TDRB secretariat should be sought in all such cases.

30.‘Maximum potential adjustment’ is the adjustment to expenditure, receipts, profits, losses, income or gains that would arise if the risk to which it relates were conceded in full to HMRC. It is calculated without reference to the strength of the arguments or the prospects of success and is the gross amount of the potential adjustment taking no account of losses or other reliefs.

31.‘Resolution’ of any dispute means any decision to resolve that dispute on a particular basis, and includes a decision to take steps that are likely to lead to the commencement of litigation, or the cessation of litigation before a case has been decided by a First-tier Tribunal. Decisions on litigation beyond the First-tier Tribunal are subject to a separate process and are not within the remit of the TDRB. Resolution proposals should be construed accordingly.

32.‘Additional Assurance’ cases are those where a decision to resolve a dispute might have a significant and far-reaching impact on HMRC policy, strategy, operations, tax receipts or HMRC’s reputation.

33.‘Unusual or novel’ features in a dispute may include the use of complex or innovative legal procedures, utilising a new piece of legislation, or technical arguments not previously used by either party.

Part 3 – TDRB Operations

Chair

34.The chair can be any member of the TDRB who is a Director.

Members of the TDRB

35.Members of the TDRB are:

• Director Large Business
• Director Wealthy and Mid-Sized Business Compliance
• Director Individuals and Small Business Compliance
• Director Counter-Avoidance
• Director Fraud Investigation Service
• Director Business, Assets and International
• Director Individuals Policy
• Director Indirect Tax Policy
• Director Customs Policy and Strategy
• Director Risk and Intelligence Service
• Director Tax Administration Directorate
• Director Compliance Operations Directorate
• Director HMRC Strategies
• Deputy Director Solicitor’s Office and Legal Services
• Deputy Director Large Business – Dispute Resolution and Governance
• Deputy Director Indirect Tax (VAT)
• Deputy Director Business, Assets and International
• Senior Specialist Tax Professionals – two year fixed term appointments

36.Where directorates are restructured or renamed an equivalent membership will be maintained.

Deputies

37.Members may be represented at Board meetings by a deputy. That deputy should, where possible, be at Senior Civil Service (SCS) level and will normally be appointed by the director of the relevant business area.

Quorum

38.The TDRB shall not be authorised to make a decision unless there are a minimum of 5 board members present at a meeting including three directors. Deputies and members invited to join by the Chair will count towards quoracy.

Conflict of interest

39.Before any case or risk is discussed, any person who is present at a the TDRB meeting will declare any conflict of interest. In this context a conflict of interest is deemed to include any prior contribution to resolution discussions with the customer or prior involvement with the HMRC team as to the basis on which a case or risk might be resolved. Conflicts of interest are to be clearly noted.

Additional members at the TDRB

40.The Chair may invite additional members (not within the list at paragraph 35) to attend TDRB meetings to support the governance process as required. This includes cases where a risk has been referred to the TDRB from an area of the business not represented by members listed above, or where there is a significant stakeholder interest.

Decisions by correspondence

41.The Chair will decide when a matter might be dealt with by correspondence rather than by discussion at a the TDRB. This will be rare and will be reserved for the most straightforward cases where an urgent decision is required. Where the TDRB business is dealt with by correspondence all of the above rules will equally apply.

Arrangements for meetings

42.Meetings of the TDRB will be held monthly or at such times as the Chair may decide.