New announcement. Learn more

CHARTERED ACCOUNTANTS (ICAEW)

News and advice to help make your property business a success

Landlords TaxProperty TaxLandlords Tax ReturnsLandlords AccountsProperty Tax ReturnProperty AccountsLandlords FinancialLandlords AccountantTaxTax ReturnsVATChartered AccountantsOnline AccountantOnline BookkeepingOnline Tax ReturnsYour Online AccountantYour Online BookkeeperBusinessadviceHMRCAccountingExpensesFHLsNICSDLTDividendsPropertyCashflowInvestment Property TaxPAYEProperty AccountantSmallbusinessTax ImplicationsTax ReliefBusinesstipsCapital Gains TaxCgtFurnished Holiday LettingsIhtexemptionsIncome TaxInheritance TaxPensionSole TraderTaxplanningCapital gains tax propertyEmployment AllowanceGiftsHoliday Lets TaxISALandlord RepairsMaking Tax DigitalMTDNational InsuranceProperty bookkeeperProperty LettingReliefTaxreturnVAT invoiceAgricultural Property ReliefAllowable Business ExpensesAnnual Exempt AmountBad Debt Tax ReliefBADRBenefits in KindBusiness ExpensesBusiness RateBusiness tipsCapital AllowancesCapital GainsCashbasisChild BenefitCommercial PropertyComplianceDeductibleexpensesDirectors LoansDisincorporationFinanceFinancialmanagementFlat Rate SchemeHMRC complaintsInterestInterest RatesLettingsMakingTaxDigitalMileage AllowanceMobilephonesMTD UpdateOverlapreliefPartnershipPartnershipbusinessesPayrollingPensioncontributionsPprProperty Company TaxProperty Tax Deductible ExpensesPropertyallowanceReimbursedexpensesRent a Room ReliefRentalResidence ReliefResidential property gainsSelfemployedSmall BusinessStamp dutyTax free incomeTimetoPayWorking from home60 day capital gains limitAbolitionclass2AccrualsbasisAcquisitionsADRAdvisoryfuelratesAIAirBnBAlphabet sharesAmapAnnual Tax on Enveloped DwellingsAppealAPRArtificial intelligenceAssessmentAsset disposalAssociated CompanyAssociated Company Tax RulesATEDAutumnstatementBad DebtBaddebtsBadgesoftradeBeancounterBenefit ReliefBenefitsBreakeven PointBudgetBusiness adviceBusiness asset defermentBusiness coachBusiness ContinuityBusiness EntertainmentBusiness RatesBusiness Rates ReliefBusinessgrowthBusinesstypesBuy or Lease EquipmentBuytoletCapital Allowances for CarsCapital GainCapitalallowancesCapitalexpenditureCar Capital AllowancesCarry Back LossesCashChange of Tax BasisChatGPTCIS SchemeClass 2 NICClass 3 NICCommon TenantCompanies ExpenditureCompanies HouseCompany Account DeadlinesCompany Account FilingCompany carCompany Strike OffCompany Tax Efficient PropertyCompanyassociationCompanyloanstaxfreeCompulsory Strike OffConstruction Industry SchemeContacthmrcContentmarketingContributionsCorporation Tax LossesCorporation Tax New RegimeCorporation Tax RatesCorporationTaxCostsCryptocurrencyCustomerlistimplicationsDeductible Business ExpensesDeductionsDeferring NICDemergerDepreciationDevelopmentDirectorsDirectorsloansDisallowable Business ExpensesDiscoveryDisposalsDispute ResolutionDividend allowanceDividend Allowance ReductionDividend PlanningDividendallowanceDLADomestic Items Tax ReliefDormantcompanyDwellingsEISEmployee DiscountEmployee managementEmployeecompensationpaymentsEmployeeOwnershipTrustEmployers NICEndoflifeplanningEnquiryEnterpriseResourcePlanningEntertainmentEntrepreneurmindsetEquityExpenses Allowed For TaxExtrabenefitEyetestsFlippingFurnished Holiday Lets TaxGift AidGift AllowanceGrowthhacksHelp to pay tax billsHICBCHMO Licensing FeesHoldoverreliefHoliday Lettings TaxHome responsibilities protectionHow to apply for a Business LoanHow to Extract ProfitHumourHybridIllegaldividendsIncomeIncome and GainsInflationary GainsInfluencersInheritance Tax Nil Rate BandInterestreliefInterestrestrictionInvoicingIR35Joint TenantKeypersoninsuranceLandlords Self AssessmentLate vat registrationLBTTLeadgenerationLeadmagnetLeanbusinessmodelLendingLetting Agent DisbursementsLetting Agent RecharresLettings ReliefLifetime LimitLimitedcompanyLiquidation DemergerLoanLoaninterestLong Lets TaxLongserviceLTTMainresidencereliefManaged LetsManagement accountingMaritalhomedivorceMarriage allowanceMarriageallowanceMileage paymentMinimumwageMixedusesdltMortgage costsMortgage Interest ReliefNew propertyNewcompanycarfuelratesNewnicrulesNIC 2023 to 2024NIC savingsNicdisregardNicreductionNMWNmwerrorsNon Allowable Business ExpensesNon-taxableNudgeletterOptiontotaxvatOverpayment ReliefOverseas propertiesPaperformPartnership schemesParttimePatternofoccupancyPAYE by Direct DebitPayrollPenaltypointsPension Payments Tax ReliefPensionsPerformance-reviewsPeriodofgracePeriodsofabsencePersonal AllowancePersonal ExpensesPersonal financePersonalallowancePersonalguaranteesPostcessationreliefPretradingexpensesProfitProfit-and-lossProfitAndLossProperty AllowanceProperty Development CompanyProperty IncorporationProperty Investment CompanyProperty investor accountsProperty investor tax tipsProperty Rental BusinessProperty TradingPropertycompanyPRRR40ReceiptsRecharges by Estate AgentsRefundRegularpaymentsRelief for FHLRent your driveRentaroomResearch & DevolopmentResidentialsdltRetail stock controlRetainedprofitsRevenueRoom for rent taxRtiSASalarySalary SacrificeSavingsSDLT changesSection 455 TaxSection455taxSelective Licences LandlordsSelf AssessmentSelf-employednicSelling OnlineSelling your CompanySeperationServicechargesSettlementslegislationSimplified ExpensesSmallbizSmallbusinessratereliefSoftwareSpring BudgetStaffpartiesStarting a businessStudent Loan DeductionsSuccessJourneySurplus CashTax Allowance on DrivewaysTax AllowancesTax billTax BreakTax CodesTax DeadlinesTax DeductionsTax Filing DeadlinesTax Free ChildcareTax on Company VansTax on Enveloped DwellingsTax positionTax RefundTax tips for landlordsTax-free savings incomeTaxable BenefitsTaxationTaxbillpaymentsTaxconsequencesTaxincentivesTaxpositionTaxpositionassetsTaxreliefTaxreliefsTaxsesTerminationpaymentsTipsTrade professionalTrading lossesTrainingTransfer AssetsTransfer Assets Between SpousesTravelUmbrellacompanyUndisclosedincomeUnpaid RentVAT Bad Debt ReliefVAT DeadlinesVAT DisbursementsVAT flat rate schemeVAT PenaltiesVAT registrationVAT Reverse ChargeVatpenaltiesVatregisteredVatregistrationthresholdWellbeingYear End
TAGS

Alternative Dispute Resolution – is it worth using?

HMRC's Alternative Dispute Resolution (ADR) process was introduced over a decade ago, the intention being to provide an 'alternative' cost-effective method for dealing with disputes between taxpayers and HMRC. ADR is a free service, although taxpayers can involve a professionally accredited mediator from outside HMRC at their own cost.

The ADR process

The process allows for the involvement of a trained ‘facilitator’, who works with both parties to resolve the dispute. The idea is that in a stalemate situation an independent facilitator acts as a neutral third-party mediator.

As has long been the case, the 'independent' mediator is an HMRC officer who has been specifically trained, from a different team within HMRC having had no prior involvement with the case. Mediation meetings default to either video or telephone, therefore any taxpayer who wishes to conduct a meeting in person will need to make representations to the mediator early in the process.

An application for a case to be considered is made online and may be made at any time, although it is more appropriate to apply once all the facts of a case have been established and an impasse has been reached between the two parties. Either HMRC or the customer can suggest the use of ADR. The dispute is then referred to the mediator who will decide whether the case is suitable for ADR within 30 days.

What types of dispute can be raised?

HMRC does not offer ADR in specific instances such as debt recovery or automatic late payment penalties, high income child benefit charges, tax credits, PAYE coding notices, disagreements regarding a point of law or cases where HMRC criminal investigators are involved. HMRC will not usually allow mediation in disputes on the same issue as one that it is intending or has taken before the Tribunal.

If the dispute cannot be resolved through mediation, then the formal internal review process, or an appeal to the Tribunal, may be used instead.

Benefits of ADR

The primary benefit is the reduction in cost for both parties. It also allows both parties to step back, reassess the situation and, with the help of a trained facilitator, attempt to resolve the issue without the added stress and cost of going to a Tribunal.

Another significant advantage is the time it saves. By using ADR, the back-and-forth of letters between the taxpayer and HMRC is eliminated, and a clear timetable for the process is established. The expectation is that a case accepted for ADR will be settled, or at least be out of the ADR process, within four months, making the process more efficient and productive for both parties. To meet this expectation, both the taxpayer and HMRC must commit to providing information requested by the mediator within 15 days. Where HMRC needs to obtain approval for any settlement agreed at the mediation, this must be done within a week of the meeting.

A ‘dedicated helpline’ is available to provide support and guidance throughout the ADR process. This helpline is intended to speed up the service and to be an introduction to the process. Taxpayers who may be considering applying for ADR but are unsure whether their specific case fits the criteria, can speak to a qualified member of the ADR team and be advised accordingly. The ‘dedicated helpline’ is not intended to answer questions relating to a specific case but to advise whether the procedure is suitable for the caller's particular problem.

Practical point

The relatively low uptake of ADR tells a story. HMRC's Annual Report and Accounts 2023- 2024 show 1,309 applications made to ADR during the tax year – a 29% increase on the previous year; of those, only 512 applications were accepted, and 83% of those resolved. Either taxpayers are unaware of the service or if they are, they do not think the case will result in their favour so do not bother.