FILINGS AND HMRC DISPUTES: STRATEGIES FOR BUSINESSES TO RESOLVE TAX ISSUES

FILINGS AND HMRC DISPUTES: STRATEGIES FOR BUSINESSES TO RESOLVE TAX ISSUES

Hmrc

As the UK’s tax authority, HMRC’s main function is to collect funds for public services and enforce UK tax laws.

However, it is trite to say that disputes can arise from tax assessments, interpretation of tax laws, discrepancies in tax returns and communication errors.

Indeed, a great number of winding up petitions against companies that we come across are issued by HMRC.

So, what are the ways businesses can resolve such disputes?

1. Early Engagement with HMRC is an effective strategy for resolving tax disputes. Businesses should engage with tax issues early to prevent minor disagreements from escalating.

Seeking clarification and understanding of tax issues as well as looking at the issues from both yours and HMRC’s viewpoint can assist businesses to reach mutual agreements.

Businesses should review their filings and confirm if tax debt is due and genuine.

Negotiate the payment of the tax debt if undisputed as this could prevent litigation or escalation of the matter and amounts to be paid. In certain situations, it may be possible to ask for time to pay arrangements to be put in place.

In situations where HMRC have already issued court proceeding such as a compulsory winding up petition and the tax debt is in fact disputed, it is important to proactively seek legal assistance to apply for an injunction to prevent the advertisement of the petition to avoid the freezing of your business assets and bank accounts and all the consequences that flow from that including the inability to pay suppliers as well as the loss of reputation.

 

2. Alternative Dispute Resolution (ADR) is also an effective strategy to resolve HMRC tax disputes. Alternative Dispute Resolution is a mediated path to resolve conflicts outside court proceedings.

This involves the appointment of a solicitor, tax consultant or an accountant who is not acting as an expert but as an independent mediator to assist the taxpayer and HMRC resolve their points of difference.

 

3. The Review Process is another method that can be utilised to help resolve tax disputes and can sometimes obviate the need to proceed to tribunal. In appropriate instances HMRC may assign an officer to review a decision or determination or other litigation following official complaint by the taxpayer.

The review officer is appointed to determine whether the initial decision aligns with legislation, policy, and practice. This process also provides feedback internally to HMRC and helps improve decision making.

Finally, it may be appropriate to appeal an HMRC decision. In cases where a dispute cannot be settled by the review process or agreement then an appeal should be considered.

The tax tribunals are generally independent of the HMRC, and arguments are presented and analysed from parties in disputes with decisions rendered at the end by a Judge.

The first-tier tribunal hears all first-time appeals, after which a taxpayer or HMRC may file an appeal with the Upper Tribunal which is able to review the decision of the first-tier tribunal.

 

 

In summary, Early Engagement, ADR and the Review and Appeals Process are potent strategies for businesses to navigate tax disputes effectively.

 

These strategies empower businesses to safeguard their interests while ensuring compliances with HMRC regulations.

 

For advice and assistance with HMRC Tax Disputes. Please contact us on 01-482-616-616 or E-mail us at enquiries@hallmarksolicitors.co.uk.

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