According to media reports, HM Revenue & Customs (HMRC) is
to take a more conciliatory approach towards resolving tax
avoidance disputes with businesses.
Dave Hartnett, the Permanent Secretary for Tax at HMRC, has
admitted that tax inspectors were sometimes too "tough",
and that a change of approach is now required. HMRC is now expected
to tell its inspectors to try to settle cases out of court, where
possible; it is also planning to launch a pilot scheme involving
third-party mediators, to see whether they can be used to help
resolve some disputes.
So why is HMRC changing its stance now? This is a pertinent
question to ask when you consider that it was only three years ago,
in July 2007, that HMRC adopted its 'Litigation and Settlement
Strategy', which stated that HMRC would pursue all tax disputes
through the courts whenever it considered it had a better than 50
per cent of success – a clear statement at the time that
HMRC would not enter into negotiated
