Alternative Dispute Resolution a permanent option for SMEs

THE TAXMAN has moved to make Alternative Dispute Resolution (ADR) a permanent offering for SMEs across the UK after a successful year-long pilot.

After receiving more than 400 applications, the service - designed to find a swift and fair outcome to disputes in order to mitigate costs and eliminate the need for a tribunal - is to remain in place.

As yet, Accountancy Age understands there are no numbers available indicating the success rate of the service. However, the taxman is expected to release a report in the coming weeks providing more evidence behind its decision to make ADR permanent.

It works by using independent HM Revenue & Customs facilitators to resolve disputes between HMRC and customers during a compliance check before a decision or assessment has been made.

It is hoped the method could help ease the strain on the tribunal system, which faces a hefty backlog. In the last quarter of 2011, 22,100 cases were awaiting first-tier hearings, while the number going through the process rose from 9,100 in 2010 to 11,000 in the same year.

HMRC director of local compliance Richard Summersgill said ADR represents a "fair and even-handed" way of resolving differences.

He said: "We have had good feedback from both SMEs and individual customers and are grateful to the professional bodies and the wider agent community for their assistance and support during the pilot stages. It allows us to work together with our customers and resolve disputes much earlier than at present."

An announcement on how ADR will continue to be used in larger and more complex cases will be made shortly.