Consultation on improving HMRC's approach to dispute resolution

Where HMRC have raised a compliance check into a taxpayer's affairs, the taxpayer or their agent have the opportunity to resolve the dispute during the check.  

Where HMRC and the taxpayer are unable to resolve the issue, a formal dispute can be raised with HMRC with the aim of resolving the issue as quickly and efficiently as possible for both parties. 

The current process, Alternative Dispute Resolution (ADR), allows for a trained and externally accredited HMRC mediator to work alongside the taxpayer to resolve disputes if they were unable to reach an agreement during the compliance check. 

Views obtained by the Government on the current formal dispute process are: 

• There is a lack of awareness of the current process and its benefits. 
• It is currently underutilised.  
• There is a misconception surrounding a lack of impartiality. 

HMRC aim to: 

• Make it easier for taxpayers and agents to resolve issues during the compliance check stage. 
• Assist taxpayers in understanding what options they have if there remains a dispute after the compliance check has ended. 
• Ensure taxpayers can identify and access the appropriate resolution for their situation. 

The Government seeks opinions on the following areas of reform for the current framework:

• Reforms to improve support and guidance for taxpayers going through a compliance intervention.
  • Improving awareness and knowledge around the current process, and focusing on strengthening how the department works with taxpayers. 
  • Continued improvements surrounding the current Statutory Review process with better signposting of the process and its benefits. 
  • Streamlining online applications and further digital routes via tracking progress and integration with taxpayers' current tax accounts. 
• Simplifying and aligning processes. 
  • Currently, there are different processes for direct and indirect tax; HMRC aim to align the processes with each other to ensure approaches for reviews are similar, payment options are aligned, and there is consistency throughout both taxes.   
  • Putting a stronger focus on continuing to engage on a more informal basis.
  • Removing the requirement to appeal to the tribunal for an ADR review in relation to indirect taxes. 
• Reforms to improve access to ADR. 
  • Expanding the current list of ADR exclusions. 
  • HMRC should be more active in promoting ADR during the compliance check. 
  • Bringing in a requirement for both parties to actively consider an ADR check before applying to the tribunal. 

The consultation closes on 7 July 2025. Responses can be made by email. 

Useful guides on this topic

How to appeal an HMRC decision
Disagree with an HMRC decision? How do you appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Discovery assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? Can HMRC issue two alternative assessments for the same period? What are your rights of appeal and defences?

Closure notice
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights? 

Statutory Review (by HMRC)
What is a Statutory Review? When does HMRC offer a Statutory Review? Is it automatic? What happens in a Statutory Review? Can you challenge a Statutory Review's findings? Can you influence a Statutory Review? When does HMRC offer a Statutory Review?

External link

Consultation: The Tax Administration Framework - Improving HMRC's approach to dispute resolution

Question 1: How should digital appeal routes for taxpayers looking to pursue dispute resolution with HMRC be designed?

Question 2: How could the dispute resolution process best be streamlined and integrated with digital services?

Question 3: Does the model proposed provide a simpler process to resolve disagreements?

Question 4: Would the model potentially improve access to statutory review and ADR where disagreements cannot be resolved in other ways?

Question 5: Is there anything further this model could incorporate to provide a simpler process?

Question 6: Are there aspects of the current ‘view of the matter’ stage that provide benefits and should be retained?

Question 7: Would it be preferable to retain the initial appeal to HMRC while incorporating the rest of the proposed model where possible?

Question 8: What could be the unintended consequences of this suggested model?

Question 9: Are there any other aligned appeal processes, which improve access to dispute resolution, you think HMRC should consider?

Question 10: Should HMRC consider an initial review/alternative stage to the process where a decision has been automated?

Question 11: Are there particular taxpayer groups for who this reform would be best or ill suited, and why?

Question 12: Should it be a requirement for HMRC and taxpayers to demonstrate they have considered other means of dispute resolution prior to appealing to tribunal?

Question 13: At what point in the taxpayer journey would it be best to make this consideration? For example, when a taxpayer is first informed about their statutory time limit to appeal to the tribunal.

Question 14: What would be the benefits and risks of such an approach?

Question 15: Including current provisions on ADR exclusions, what criteria would be most appropriate to refer taxpayers to ADR without overwhelming resource and capability?

Question 16: How can we best identify taxpayers who are most likely to be unaware of ADR as an effective dispute resolution tool?

Question 17: What types of impasses or queries best suit a referral to ADR?

Question 18: What points within the taxpayer journey are best to refer a taxpayer to ADR?

Question 19: Are there other approaches for an ADR consideration requirement that HMRC could consider?

Question 20: Is it feasible for HMRC to charge the taxpayer for using the ADR service?