Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions she has had with HMRC on the effectiveness of using mediation in tax disputes.

HMRC’s Alternative Dispute Resolution (ADR) service can help in cases where there is a dispute. An HMRC mediator will work with the customer, their agent and the HMRC caseworker to explore points that might have been misunderstood and try and reach agreement on a way forward.

If a case is accepted into HMRC’s ADR process, it will typically incur no cost to the customer, unless they choose to be represented by an agent, or hire a mediator of their own choice to co-mediate. A mediator will aim to conclude the process within 4 months.

In 2024-25, of the cases accepted into the ADR process, 88.7% of these were resolved. This illustrates the benefit of ADR in appropriate cases in resolving and clarifying points to ensure both parties come to an agreement and prevent unnecessary litigation.

A key component of successful ADR is the collaboration of both parties to the dispute working towards an agreed outcome within the parameters of ensuring the correct tax at the correct time.