HMRC Publishes Litigation And Settlements Strategy

by Jason Gorringe, Tax-News.com, London

12 June 2007

HM Revenue & Customs last week published its 'Litigation and Settlements Strategy'.

The Litigation and Settlements Strategy sets out principles for bringing tax disputes to a conclusion, whether by agreement with the taxpayer, or by litigation, i.e statutory appeal to an independent body, including the General or Special Commissioners, the VAT Tribunal, or the courts.

According to HMRC, the central themes of the LSS are to:

• Seek non-confrontational solutions where possible.
• Focus on issues that will best serve HMRC’s goal of tax gap reduction.
• Choose cases for their wider impact, as well as for their own value.
• Where there is a strong case, to seek full value from settlement, or take the matter to litigation.
• Not pursue weak arguments.
• Team-work cases with colleagues, including those in other parts of HMRC.

The use of ambiguous terms such as "strong case" has unsettled some observers, who fear that the tax authority has become tougher in its appoach since the merging of the Inland Revenue and Customs departments, and is likely to continue along that path. However, HMRC has denied that it is becoming more litigious.

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