HM Revenue and Customs (HMRC) have recently published a new ‘Litigation and Settlements Strategy’ (LSS), setting out plans for dealing with tax disputes in the future.
The core principles of the LSS are that HMRC will:
- seek, whenever possible, a non-confrontational solution to the dispute;
- focus on the issues that best serve their policy of ‘tax gap reduction’ (the difference between the tax due and tax paid);
- choose cases for their wider impact as well as for their own value (i.e. will seek to find, and presumably publicise, ‘example’ cases);
- seek the maximum sum where their case is strong and will litigate where appropriate; and
- not pursue weak arguments.
In addition, it is stressed that the different branches of HMRC will work as teams, meaning VAT and tax officers will look at the same cases.
In practice this means that whilst there may be less time wasted dealing with trivial points, where HMRC think they have a good case, taxpayers can expect them to take a hard stance on disputed points.
HMRC has recently announced that they expect to open enquiries on over 100,000 people who have bank accounts abroad.