In the ongoing push towards the use of alternative dispute resolution (ADR) in tax disputes, a Practice Statement was issued by the Chamber President of the First-Tier Tribunal (Tax Chamber) on 9 May 2025.
The Statement updates that which was issued five years ago regarding Alternative Dispute Resolution (ADR) in relation to First-tier tax tribunal proceedings and explains:
- what ADR is;
- how to apply for ADR;
- how the Tribunal is involved;
- how and when the Tribunal will facilitate the use of ADR; and
- costs implications.
In particular, in relation to costs, it is noted that:
- an unreasonable failure to consider or enter into ADR may in some cases result in costs being awarded against a party and could potentially constitute unreasonable conduct; and
- where the appeal has been allocated to the Complex category and is within the costs regime the costs of ADR may be recoverable.
This, coupled with potential changes (currently being consulted on by HMRC) to make access to ADR available at an earlier stage in respect of indirect tax matters, and to widen the scope of disputes which are eligible for ADR, illustrates HMRC's hope that ADR may become a more widely used mechanism for resolving tax disputes.
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2025.