In 2007, HMRC published the litigation and settlement strategy (LSS), which was revised in July 2011 following some key cases.
The LSS sets out the principles and standards which HMRC should apply when settling disputes with taxpayers. The general principles include:
In tax avoidance cases, if HMRC’s position is strong, HMRC should not settle for less than 100% of the tax and interest due.
HMRC is responsible for collecting and managing the public revenue and by adhering to this approach the aim is to act consistently.
If it is possible to reach a settlement then HMRC are open to resolving matters without resorting to litigation. In many cases this is the best possible outcome, particularly if all relevant factors (such as interest, penalties and consequential tax charges) are taken into consideration at the time.
Leanne is a Chartered Tax Adviser, specializing in advising on UK tax matters but also including overseas tax as needed. Leanne is head of Taxation Services at EHL Solicitors in Leicester.
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