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Alternative Dispute Resolution (ADR) is a mediation process recognised by HMRC to resolve tax disputes without moving directly to Tribunal. Introduced in 2013, it focuses on disagreements about tax principles or their application. The process runs separately from litigation and follows defined procedural rules set by HMRC.
ADR is suited to individuals in an HMRC dispute where a point of principle is contested. It commonly applies where there is disagreement over HMRC’s interpretation of tax law. The process may arise across different tax enquiries and is usually considered before a Tribunal hearing is arranged.
ADR provides a structured environment for both parties to explain their positions and examine disputed principles. It allows assumptions to be tested and misunderstandings explored through discussion. This approach can help narrow issues, reduce uncertainty and assess whether agreement is possible within a single dispute.
A taxpayer may apply for Alternative Dispute Resolution where disagreement exists on a tax principle. HMRC may accept or refuse the application. Either party can withdraw at any stage. If ADR does not resolve matters, the dispute may continue through existing HMRC procedures or Tribunal processes.
ADR allows multiple disputed issues to be considered together. Discussions are held on a without prejudice basis, so positions do not affect later proceedings. HMRC may concede a principle where its position is uncertain, but cannot reduce part of a tax charge linked to that principle.
ADR follows strict mediation rules and involves technical tax principles. Positions and concessions must be handled carefully, particularly where Tribunal proceedings may still follow. Understanding these boundaries is important, which is why many individuals choose support from tax specialists experienced in HMRC dispute resolution.
ADR may result in agreement on specific principles, partial resolution of a dispute, or clearer understanding of HMRC’s position. In some cases, it helps define remaining issues before further action. While settlement is not guaranteed, the process can provide clarity and direction for next steps.
Alternative Dispute Resolution is a mediation process recognised by HMRC to help resolve tax disputes without moving straight to Ttribunal. It focuses on disagreements about tax principles or how tax law is applied, rather than factual issues alone. The process operates separately from litigation and follows defined procedural rules set by HMRC, providing a structured setting for discussion between the taxpayer and HMRC.
Alternative Dispute Resolution applies where there is a genuine disagreement with HMRC over a point of principle or interpretation of tax law. It may arise across different types of tax enquiries and is usually considered before a tribunal hearing is arranged. ADR is not limited to a single tax area and can be relevant wherever HMRC and a taxpayer hold differing views on how tax rules apply.
ADR is intended for individuals involved in an HMRC dispute where a point of principle is contested. It is particularly relevant where a taxpayer disagrees with HMRC’s interpretation of tax legislation or its application to their circumstances. The process is suitable for those seeking to explore whether a dispute can be narrowed or clarified before progressing to formal Tribunal proceedings.
Alternative Dispute Resolution differs from a Tribunal process because it is a mediation based discussion rather than a formal legal hearing. ADR allows both parties to explain their positions and examine disputed principles in a without prejudice setting. Tribunal proceedings are formal and adversarial, whereas ADR focuses on structured dialogue and clarification, while still operating within HMRC’s defined procedural boundaries.
During ADR, discussions take place between the taxpayer and HMRC within a structured mediation framework. Each side explains its position and examines disputed tax principles. Meetings are held on a without prejudice basis, meaning statements made do not affect later proceedings. HMRC may concede a principle where its position is weak, but it cannot reduce part of a tax charge linked to that principle.
Yes, either the taxpayer or HMRC can withdraw from the Alternative Dispute Resolution process at any stage. Participation in ADR does not require either party to remain involved if agreement is not possible. If the process ends without resolution, the dispute can continue through existing HMRC procedures or progress towards tribunal, without positions taken during ADR affecting later stages.
If ADR does not resolve the dispute, the matter may continue through HMRC’s existing procedures or move towards Tribunal proceedings. In some cases, ADR helps clarify HMRC’s position or narrow the remaining issues, even if full agreement is not reached. This can provide greater clarity on the points still in dispute before further action is considered.
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