LSS20800 - Deciding whether to engage in a dispute

In general, where there is a point of dispute on the treatment of a matter, the Litigation and Settlement Strategy (LSS) says that we will not take that dispute further unless the overall revenue flows potentially involved justify doing so.

You must consider all relevant factors before making this decision, including, but not limited to:

  • what is at stake in the dispute itself
  • potential tax liabilities of the same or another person in cases where a precedent may be set, or where we are seeking to influence the person’s behaviour 
  • disputes involving large amounts of tax, where there is a key principle at stake that, even if the legal advice indicates that we might lose a case, it would be irresponsible of us not to pursue it

In any tax dispute you must decide:

  • how to move the dispute towards resolution (including whether to use formal powers), and
  • the terms on which HMRC may be ready to resolve the dispute (in the absence of a finally binding outcome from litigation)
  • whether to obtain policy and/or legal advice
  • Please also consider early on whether your dispute may require presenting to one of HMRC’s  governance boards (Dispute Resolution Boards, or other) and make the relevant Secretariats aware