New record figures for tax tribunal waiting list

The number of tax disputes headed for litigation set a new record last year, with official figures showing that the number of outstanding cases has doubled over the past four years.

Advisers are urging HM Revenue & Customs to do more to clear the backlog by stepping up efforts to resolve disputes without resorting to litigation.

Jason Collins, head of tax at law firm Pinsent Masons said;

“These figures show that there is a huge backlog of tax disputes still building up between HMRC and taxpayers which is costing businesses and individuals dear – both in terms of time and money – while they remain unsolved.”

HMRC responded by saying;

“There is no backlog, lots of cases are linked and since the majority of tribunal decisions go our way, cases will clear automatically once decisions are given in our favour.”

They claimed that comparing the number of cases across the years had ‘little value’ and  rejected reports that they were facing a growing backlog by claiming large numbers of taxpayers settled before the date of the tribunal hearing.

According to the most recent figures available for 2011-12, HMRC won two-thirds of the 1,395 cases heard by tribunal.  It resolved three times that number with as many being withdrawn or settled in the light of other tribunal cases.

Earlier this month HMRC introduced an Alternative Dispute Resolution mechanism for small businesses and individuals which used a Revenue official not previously involved in the case to assist both sides in agreeing the key facts of a dispute and narrowing down the areas of disagreement.

The introduction of ADR has been broadly welcomed by Collins as a ‘positive move’ but still maintained it would not solve everything. He added;

“Until recently HMRC has taken a deliberately aggressive stance against those who it believes are not paying the right amount of tax and this is reflected in the continuing upward trend we are seeing in tribunal cases awaiting a hearing.”

“Of course it will take time for HMRC’s change of attitude to filter through but nevertheless they could be doing even more to reduce the amount of litigation it embarks on and take a still more flexible approach.”


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