Guidance

Contentious Issues Panel: Terms of reference

Published 12 September 2024

1. Terms of Reference

1.1. Background

The HMRC Contentious Issues Panel (CIP) is part of the HMRC governance framework for decisions in resolving tax disputes.

The HMRC Code of Governance requires cross-HMRC decision-making bodies to make decisions about our approach to resolving major disputed points arising, or expected to arise, in multiple cases.

For major contentious issues arising in relation to tax, the CIP has been authorised by the Commissioners for Revenue and Customs to:

• decide HMRC’s strategy for handling major contentious issues
• agree an approach for resolving such issues in accordance with the Litigation and Settlement Strategy

1.2. Operational principles

The following principles underpin the operation of the CIP:

• deciding our approach to resolving a disputed point that arises (or is expected to arise) in multiple cases and applying it consistently is an important part of the even-handed and fair administration of the tax system

• decisions on contentious issues will be subject to challenge and scrutiny by representatives from multiple areas of HMRC

• our tax professionals should be able to understand and consistently apply HMRC’s governance processes, including how governance bodies fit with their own roles in taking decisions in tax disputes

• all governance processes should be proportionate, effective and efficient, and should not adversely impact operational delivery and customer experience

1.3. How the CIP will operate

The CIP will ensure that cases with the same major contentious issue are handled in a co-ordinated and consistent manner across HMRC.

The CIP will take referrals from issue owners. The issue owner will normally be the policy owner even if the referral was requested by another governance board. However, the CIP will accept a referral from another governance board if there is a good reason for that board to make the referral.

The CIP will decide the strategy for handling the major contentious issue submitted by the issue owner. Decisions in individual cases with the same major contentious issue must take the agreed strategy into account.

Where a major contentious issue is present in a case, which is also within the remit of the Tax Disputes Resolution Board (TDRB) or any other case governance body in a line of business, any proposals to resolve the specific dispute in that case must still be referred to that body, subject to any exception process in place. Decisions of the TDRB and other case governance bodies will take account of the strategy the CIP has agreed.

Any decision of the CIP in relation to agreeing a handling strategy for a major contentious issue needs to be made unanimously by panel members in attendance at the relevant meeting. Where the CIP cannot reach a decision it may, where appropriate, request that further work is undertaken by the issue owners or refer the issue to the Commissioners.

The Chair of the CIP will on occasion refer an issue to the Tax Assurance Commissioner or to HMRC Commissioners as described below:

• where, exceptionally, the CIP cannot reach a decision and it is not appropriate to refer the issue in question for further work, the Chair will refer the issue for decision to the Tax Assurance Commissioner and the Director General for the relevant line of business - if those Commissioners believe it would be helpful, a third Commissioner may be asked to take part in making the decision

• where, exceptionally, the CIP agrees that a basis for resolving an issue represents the best outcome for the Exchequer but this is not consistent with the Litigation and Settlement Strategy, the Chair will refer the proposed basis for resolution to the Tax Assurance Commissioner for their view before the basis is adopted

• the Chair may refer any other issue to the Commissioners for decision if they think it is appropriate in the circumstances

1.4. Definition of ‘major contentious issue’ – criteria for referral

The CIP considers issues involving points of law or practice which:

• might have a significant and far-reaching impact on HMRC policy, strategy or operations
• affect multiple cases
• result in major litigation

It is not necessary to refer every issue described above to the CIP. Issues only need to be referred if they are ‘major’ and ‘contentious’.

An issue will be regarded as contentious if there is something difficult or sensitive about the decision-making process from a governance point of view. For example, the legal point might be finely balanced or there might be grounds for uncertainty as to whether to implement a position retrospectively or prospectively.

There is no requirement for a minimum amount of tax at risk for referral to the CIP. However, the amount can be taken into consideration in determining whether the issue is major enough to need to be referred.

It is likely that a referral will be required in any of the following circumstances, even if the amount of tax at risk is low:

• key internal stakeholders, for example the policy team and operational colleagues, cannot reach agreement about how to proceed
• there is perceived risk of unfairness to taxpayers
• there is risk of reputational damage
• there is any other difficulty or sensitivity about determining the handling strategy that merits CIP involvement to ensure a fair and even-handed application of the tax system

Every effort should be made to resolve any internal disputes before referral and all stakeholders’ views should be represented in the referral documentation.

1.5. Examples of issues that do not need to be referred

• the policy owner intends to defend what is clearly longstanding published policy with good prospects of success. There is nothing difficult or sensitive about the policy owner’s proposal from a governance point of view, for example all stakeholders are in agreement and there is no risk of unfairness or reputational damage

• the policy owner intends to concede a point disputed by a handful of taxpayers on the basis of counsel’s advice that we are likely to lose in court. There is minimum tax at risk and no effect on future cases as the law has since been amended. There are no special circumstances that would justify maintaining the position

The secretariat should be contacted if there is any doubt as to whether an issue should be referred to the CIP.

2. CIP Operating Procedures

2.1. Composition of the HMRC CIP

Chair

A Director from Customer Strategy and Tax Design.

Any of the deputy directors who are members of the Panel may deputise as Chair, or the Chair may choose to co-opt another director to the panel to deputise.

Members of the CIP

Deputy Directors Business, Assets and International (x2)

Deputy Director Indirect Tax

Deputy Director Borders and Trade

Deputy Director Individuals Policy

Deputy Director Solicitor’s Office and Legal Services

Deputy Director Large Business

Deputy Director Compliance Operations Directorate

Deputy Director Wealthy and Mid-Sized Business Customers

Deputy Director Individual and Small Business Customers

Deputy Director Counter Avoidance Directorate

Deputy Director HMRC Strategies

Deputy Director Tax Administration Directorate

Commissioners’ Advisory Accountant

2.2. Administration of the CIP

Quorum

The CIP shall not be authorised to make a decision unless there are a minimum of 5 panel members or their deputies present at a meeting (see exception below for urgent issues). Further, no decision is to be taken on any issue where a member (or their deputy) from the relevant directorate for that issue is absent.

Deputies

A member may be represented at a panel meeting by a deputy.

Deputy Directors (SCS1) (or their nominated deputies) who are not members may be co-opted to the panel when an issue has been referred to the CIP from their Directorate, or where they hold a significant stakeholder interest.

Conflict of interest

Before any contentious issue is discussed, any person who is present at a CIP meeting will declare any conflict of interest. In this context a conflict of interest is deemed to include any prior contribution to discussions with customers or HMRC issue owners as to the basis on which a contentious issue might be resolved. Conflicts of interest are to be clearly noted.

Arrangements for urgent issues

The Chair will decide when a matter might be dealt with outside of the normal CIP meeting schedule, but such occasions will be rare.

For exceptionally urgent matters the secretariat will seek to arrange a meeting between panel members or their deputies sufficient in number to form a quorum under item 1. Alternatively, the Chair may choose to co-opt two other directors to the CIP to consider an exceptionally urgent issue, in which case the 3 Directors will be authorised to decide the matter provided key stakeholders are represented.

The CIP may also make decisions by correspondence where it is appropriate to do so. Where CIP business is dealt with by correspondence, usual CIP procedures will apply.

Arrangements for meetings

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

Referrals

Referrals must be made using the CIP submission template (unless agreed otherwise with the CIP secretariat) and sent to the CIP secretariat. The secretariat will aim to make papers available to panel members five working days before the CIP meeting.

All referrals, including requests for advice, must be made via the CIP secretariat. All referrals must carry appropriate security markings.

Update to the Tax Assurance Commissioner

A short note summarising each individual issue considered by the CIP will be sent to the Tax Assurance Commissioner after every meeting.