This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Compliance Handbook

Litigation and settlement strategy: handling a dispute: overview

Wherever possible, we seek to handle disputes non-confrontationally and by working with the person with whom we have the dispute, or their agent.

Our collaborative approach requires all parties to be open, transparent, and focused on resolving the dispute. The principles of Open and Early Dialogue (OED) are well established in our compliance checks and align with what the Litigation and Settlement Strategy (LSS) says about collaborative working.

We can build on the principles of OED by fully explaining the particular risks to be addressed at the first opportunity once we have started a compliance check. This will help clarify the risks being addressed and will save time for both parties.

This means that we must share sufficient detail of the risk unless there are specific reasons for not doing so. In other words, we should tell the person whose tax affairs we are checking, what we believe may be wrong and why.

As part of the process we will need to establish and understand the relevant facts to address the risk as quickly and efficiently as possible. Where we need to, we should use our statutory information and inspection powers in order to obtain the relevant information and documents quickly and efficiently.

We will work disputes to the same professional standard whether they are resolved by agreement or through litigation.

The guidance at CH40720 onwards gives more detail about how we handle disputes under the LSS.