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HMRC internal manual

International Manual

Arbitrage: legislation and principles: procedures: Disputes

If HM Revenue & Customs and the company disagree about the applicability or the effect of the legislation, the dispute should be settled in the usual way using self assessment enquiry procedures. Disputes may arise if:

  • the company believes that the conditions required to trigger the anti-avoidance legislation are not met - for example, if the company considers that there is no UK tax advantage purpose;
  • the effect of the legislation differs from that proposed by HMRC in the notice; or
  • there is disagreement concerning the amount that must be disclaimed to prevent the operation of Rules A or B of the deductions legislation (see INTM595110).

In each case, the company should explain the reasons for its view and provide information and evidence in support. If, on the basis of the new information provided, HMRC is able wholly or partly to agree with the company’s contentions, it may accept the self assessment. HMRC may issue a further notice if, based on new information, it takes the view that the legislation should have different effect than set out in the original notice.

If the company and HMRC are unable to reach agreement, the dispute may be referred to the First-tier Tribunal in the normal way. The First-tier Tribunal will be able to consider all of the arguments advanced by the company in accordance with the first paragraph above.

Referrals may be made to the Upper tribunal on a point of principle in order to determine whether and to what extent the anti-avoidance legislation applies (see INTM595110).