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HMRC internal manual

Compliance Handbook

Litigation and settlement strategy: what is a dispute

The terms ‘tax dispute’ in the Litigation and Settlement Strategy (LSS), and ‘dispute’ in this guidance, refer to any dispute that relates to tax, duty, associated payments, or any other matters administered by HMRC. The principles of the LSS therefore cover all disputes, except for cases handled through criminal proceedings, over

  • substantive tax liabilities, including National Insurance, excise duty, and VAT
  • interest
  • penalties
  • other duties, levies and fees
  • other matters for which HMRC has supervisory responsibility.

The term ‘dispute’ means any situation where HMRC and the person, or their agent, disagree about an issue and as yet there is no resolution.

This disagreement could arise, for example,

  • in pre-transaction or pre-return clearance work, or
  • after a transaction has taken place and one party presents a view.

A dispute is about a distinct issue on which agreement has not yet been reached. For a single tax return, for example, there may be a number of disputes. Each dispute must be considered separately, see CH40840.