That will be the conclusion of a panel at International
Tax Review's Tax & Transparency Forum in London on
Speakers will explain how being transparent in the way
officials and taxpayers manage tax disputes can avoid
unnecessary costs, curtail the length of a battle, and boost
the chances of resolution.
One of the main focus points of the discussions will centre
on the debate between taxpayer confidentiality and transparency
Using HM Revenue & Customs (HMRC) as an example,
speakers will highlight how the UK's tax authority need to
maintain confidentiality is being perceived by many as a byword
for secrecy and privilege.
The session will explain how a damning report criticising
the way HMRC handles its disputes with large taxpayers saw the
creation of a new role that aims to make HMRC's processes more
open and accountable.
An assurance commissioner will be appointed to scrutinise
large settlements and ensuring the wider interests of taxpayers
A report from the Public Accounts Committee of the UK House
of Commons in December slammed HMRC's approach to settling
disputes with large taxpayers.
The committee, which is made up of members of Parliament
from all political parties, said that £25 billion ($39
billion) was outstanding in unresolved tax bills and that those
who negotiate and those who authorise tax settlements to
recover this money had to be different people. It accused HMRC
of not being straight with it about how settlements were
"[The commissioner will] oversee all large settlements and
protect the interests of taxpayers at large and publish a code
of governance for tax dispute resolution," said James Bullock
of McGrigors (changing its name to Pinsent Masons from May 1),
who will moderate the session.
The panel will also scrutinise the opportunities for
taxpayers to resolve dispute using the alternative dispute
resolution (ADR) scheme.
In September HMRC published draft guidance on ADR.
Previously a tax dispute was only settled by bilateral
agreement between the HMRC caseworker and the taxpayer or at a
Tribunal. Now HMRC is prepared to consider alternative
- Facilitative mediation, where the mediator offers no
opinion but brings the two parties together;
- Evaluative mediation, where the mediator may offer a view
on the merits of the respective parties; and
- Expert determination.
"HMRC is more determined than ever to ensure that tax
planning is challenged and the pace of these challenges is
increasing," said Ray McCann, of McGrigors. "The amount of
resource HMRC is prepared to deploy should not be
underestimated and they may also look to attach a broader range
of liabilities for example income tax, CGT and IHT.
Understanding how best to use various dispute resolution
techniques will be increasingly important.HMRC says the key
elements when approaching a dispute are to support customers in
getting their tax right the first time to prevent a dispute
arising, and, when a dispute does arise, resolving it in a way
which establishes the right tax due at the least cost."
The Forum is free to attend for tax directors and NGOs. For
a full programme and details of how to register, click here.