UK and International Tax news
HMRC Litigation and Settlement Strategy
Thursday 21st July 2011
HMRC has recently published updated guidance on its Litigation and Settlement Strategy [LSS] which was originally introduced in 2007.
The LSS sets out the principles within which HMRC handles all disputes relating to taxes, duties or credits, where those disputes are subject to civil law procedures, and whether disputes are resolved by agreement with the customer or through litigation. This includes most of HMRC’s compliance activity.
The key elements of HMRC’s approach to tax disputes include supporting taxpayers [customers] to get their tax right first time, so preventing a dispute arising in the first place, and resolving those disputes which do arise in a way which establishes the right tax due at the least cost to HMRC and to the taxpayer, which in most cases will involve working collaboratively.
The LSS encourages HMRC staff to:
(a) minimise the scope for disputes and seek non-confrontational solutions,
(b) base case selection and handling on what best closes the tax gap,
(c ) resolve tax disputes consistently with HMRC’s considered view of the law,
(d) handle and resolve disputes cost effectively, based on the wider impact or value of cases across the tax system and across HMRC’s customer base,
(e) ensure that the revenue flows potentially involved make any dispute worthwhile,
(f) in strong cases to settle for the full amount HMRC believes the Tribunal or Courts would determine, or otherwise litigate,
(g) in ‘all or nothing’ cases, not to split the difference, and
(h) in weak or non-worthwhile cases, to concede rather than pursue.
If you would like further information on the LSS, please contact Keith Rushen on 0044 (0)20 7486 2378.Contact Us