30 July 2020

HCR pilots tax mediation with HMRC

The successful pilot of a tax mediation by video has led to HMRC introducing the service nationally only eight days later.

Sarah Woodall, Head of Tax at HCR, pressed for the pilot to take place and was delighted both by the result and by the roll-out of the tool across the country, benefiting many others. Video and telephone conferencing will now be among the options on offer for alternative dispute resolution (ADR) and those wishing to apply for ADR can do so here.

Here she answers some key questions about the process and what the new tool will offer.

Q: Does mediation work in the context of tax cases?

A: Yes, my experience in the hundred or so cases I have been involved in has been that mediation results in an agreement between the parties in most cases.

Q: Is mediation possible during this pandemic?

A: Yes. In July we took part in a video tax mediation with HMRC. Videoconferencing proved a very effective tool, in my opinion.

In the context of tax, this was the U.K.’s first mediation using videoconferencing. It is very pleasing that only eight days after the mediation concluded HMRC introduced video mediation nationally.

Q: Video mediation sounds like an innovative idea. What caused this change?

A: Many factors are likely to have contributed. Our initial submissions for video mediation were not accepted by HMRC, but following Judge Greg Sinfield’s First-Tier Tribunal (Tax Chamber) Practice Statement of 15 June 2020 about alternate dispute resolution in tax disputes, HMRC did change its mind. Arguably, the pandemic has driven this change which in my opinion represents great progress, particularly for clients who may need to shield or otherwise take extra care of their health.

Q: Were there any special features in your case that meant mediation using videoconferencing was particularly important?

A: Yes. One client and a professional adviser were shielding, and the videoconferencing tool meant they were not disadvantaged or excluded from the mediation. Videoconferencing seems an excellent and reasonable adjustment in such cases. HMRC chose to appoint two mediators, which was very effective.

Q: Do you have to be qualified as a mediator to represent a client in a mediation with HMRC using videoconferencing and should clients use a mediator?

A: No, although I think it really helps. I qualified as a mediator in 2011, whilst working within HMRC, and I do find the training continues to prove extremely helpful and informs my approach in every case. I would certainly recommend having a qualified mediator as your representative if you are involved in any aspect of a mediation with HMRC.

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About the Author
Sarah Woodall, Head of Tax, Partner (Barrister)

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