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HMRC internal manual

Compliance Handbook

Litigation and settlement strategy: minimising the scope for a dispute

HMRC’s customer-centric business strategy is built on the belief that supporting those we do business with helps them arrive at the right tax at the right time.

The starting point of the Litigation and Settlement Strategy (LSS) is therefore to reduce the scope for disputes to arise. Open and Early Dialogue (OED) between HMRC and the person we are checking may allow a difference of views about situations or transactions to be identified and addressed.

OED may include explaining to the person

  • what we are checking
  • why we are checking it
  • what could be wrong and why
  • our assessment of the identified risks.

By explaining this as soon as we start a compliance check our aim is to resolve uncertainty and eliminate any potential disputes about these matters. In some cases, sharing risk information before we open a compliance check may encourage the person we are dealing with to submit correct returns without the need for further enquiry.

If a dispute still arises, see the guidance at CH40600 onwards.