Her Majesty's Revenue and Customs (HMRC) is trialling a new dispute resolution service for small businesses.
The Alternative Dispute Resolution (ARD) scheme will use independent HMRC facilitators to resolve disputes between the Revenue and businesses during a compliance check but before any decisions or assessments are made.
The ARD, which is being tested in North Wales and the North West, is an attempt to reduce costs for both taxpayers and HMRC and avoid tribunals.
Jim Stevenson, assistant director of local compliance, said: "ADR is a good opportunity for HMRC to work together with our customers to potentially resolve disputes much earlier than at present.
"We have found often there are communication problems, so the HMRC facilitator will help all parties reach a shared and full understanding of the disputed facts and arguments.
"They will also ensure there is good communication, and help explain what each side is trying to say to the other. The aim is to resolve the dispute or, if not, as many issues as possible."
ADR does not affect existing processes or review and appeal rights, and covers both VAT and direct taxes.
The service will not cover cases which can legitimately be settled within the parameters of HMRC's litigation and settlement strategy; cases relating to issues requiring clarification in the wider public interest; or cases which could only be resolved by an HMRC departure from its policy views.
John Cassidy, tax investigations and resolutions partner at business consultancy PKF, questioned the independence of the service.
"Any measure that provides small to medium enterprises (SMEs) with an alternative to a tribunal will be welcomed by business owners," he said.
"However, SMEs will need to be reassured that a procedure reliant upon an HMRC facilitator is genuinely independent.
"Bosses will shun the ADR unless they believe that they will get a fair hearing from the taxman."
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