An HMRC ADR mediation is usually a single day, held in person or by video, in which an impartial HMRC mediator moves between joint sessions and private sessions with each side to help you and the HMRC caseworker reach agreement. The decision makers on both sides attend, and the mediator never imposes an outcome. At the end the mediator drafts a Record of Outcome listing what was agreed and what remains in dispute, with any settled appeal stated in statutory terms.

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Who is the HMRC mediator, and whose side are they on?

The mediator is an HMRC officer, but not part of the team dealing with your case. HMRC’s Alternative Dispute Resolution Guidance (ADRG) says the mediator is professionally trained and tasked with acting as an impartial and neutral facilitator, and will not introduce personal views (ADRG01500). Their job is to understand both positions, help each side see the other’s view and broker an agreement both can accept.

ADRG01600 is clear about the limits: the mediator does not impose a solution or make direct suggestions, though they will push both sides to consider every option. The decision to settle stays with you and the HMRC officers. If you want an outside mediator, ADRG01200 allows a professionally accredited one to take part at your own cost, working alongside an HMRC mediator who keeps final control of the process.

Who attends the mediation day?

ADRG02200 says the decision makers on both sides must be present so that agreement is possible on the day. In practice:

  • Your side: you, or for a company someone with authority to settle, plus any professional representatives. A meeting without the taxpayer present happens only in exceptional cases.
  • HMRC’s side: usually the caseworker and their manager, and sometimes technical or policy specialists.
  • Others: factsheet CC/FS21 says you can bring someone such as a tax adviser, friend or family member, and you will be asked to confirm you are happy for your tax affairs to be discussed in front of them.

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What happens before the day?

When your application is accepted you commit to the ADR principles. These include being available for a mediation meeting within 90 days, disclosing in writing all relevant facts and evidence before the meeting, and providing any further information the mediator asks for within 15 days. Breaking these terms allows HMRC to remove the dispute from ADR (ADRG01300).

The mediator will have separate preliminary conversations with you and with HMRC, usually by phone or video. A few days before the meeting, each side writes a summary of no more than one or two pages setting out what it thinks the dispute is about, the key facts and arguments, any solutions already offered and the legislation relied on (ADRG02300). The statements are exchanged through the mediator. CC/FS21 stresses that your statement should not be a history of the compliance check.

ADRG01400 notes that some disputes are resolved during this preparation without a formal day at all.

How is the day structured?

ADRG02400 describes a typical day, though the mediator may change the format as it goes:

  1. Joint opening. Three rooms are normally used: one for each side and a joint room. On video calls the separate rooms are set up as separate Microsoft Teams meetings. The mediator recaps how the day will work and agrees ground rules.
  2. Opening statements. Each side gives a short uninterrupted statement of its current view. The mediator draws out the underlying issues and what each side needs from the day.
  3. Private sessions. The sides go to their own rooms and the mediator visits each in turn, typically for 20 or 30 minutes per visit. The mediator may reality test positions and ask each side to consider its best and worst alternatives to a negotiated solution.
  4. Further joint sessions. Once positions are clearer, the mediator brings both sides back together to work on specific issues.
  5. Bargaining. In the later stages the mediator may act as a negotiation coach in private sessions, helping each side frame offers and counter offers.

ADRG01700 says the mediator treats your negotiating position as private unless you choose to share it with HMRC. That is different from a tax fact, explained below.

What does “without prejudice” cover, and what does it not?

Discussions about how to resolve the dispute are without prejudice. ADRG01800 explains this means proposals made during mediation cannot be treated as admissions later. Its example: a business that proposes a floorspace method for attributing costs at mediation can still argue for a turnover method at the tribunal, and HMRC cannot refer to the earlier proposal.

Tax facts are not protected. ADRG01900 defines a tax fact as one with legal and technical implications for liability, such as the receipt of a payment, the making of a supply, the identity of a customer or the place of supply. If you reveal at mediation that some supplies were made outside the UK, HMRC cannot ignore it. The guidance also gives a cash sales example: the negotiation over what share of a sole trader’s takings were cash is without prejudice, but an agreed figure of 30% is a tax fact to be recorded. Documents exchanged during ADR are on the formal record whatever label you put on them (ADRG02000), and the mediator’s notes may be disclosable at tribunal (ADRG02100).

How is any agreement recorded?

ADRG02500 says that at the end of the mediation, with both parties’ help, the mediator drafts the “Record of the outcome of the ADR meeting”. It lists each appealed decision brought into mediation and records, for each one, whether it was agreed and on what terms. The template at ADRG03300 also records attendees, issues not yet under appeal, agreed tax facts and next actions.

Settled appeals are stated in statutory terms, for example as agreed under section 54 of the Taxes Management Act 1970 or section 85 of the Value Added Tax Act 1994, so the agreement is conclusive. Parties confirm by email or, if together, by signature. Under both sections you can still give written notice within 30 days of the agreement that you wish to resile from it. Our page on settling an appeal by agreement covers this in more detail.

The record is usually finalised on the day, but ADRG02500 allows extra time where HMRC needs to check figures or obtain governance approval. The mediator aims to issue the final record within a week, and where wording needs input the parties have three weeks to agree it. In some categories of case, any deal is provisional until a Dispute Resolution Board or similar panel ratifies it (ADRG03100), and the mediator will tell you if that applies.

What if the mediation does not settle the dispute?

The Record of Outcome can show partial agreement or simply that no agreement was reached. If discussions revealed a tax fact and the parties cannot agree how to record it, ADRG01900 says HMRC should set it out to you in writing. ADRG03300 says the mediator will tell the tribunal, through HMRC Legal Group, that ADR has concluded, and the appeal then continues. Preparing for a hearing is covered in what happens at a tax tribunal hearing.

How should I prepare?

Illustration only. A builder disputes an assessment adding £20,000 of undeclared income. Before the day, his adviser sends a two page statement focused on the three disputed bank deposits, with the loan agreement that explains one of them. The builder attends with authority to settle. In private session he tells the mediator he could accept tax on one deposit, and the mediator keeps that private until he authorises it to be shared. HMRC accepts the loan evidence, and the parties agree the assessment should be reduced to tax on £8,000. The mediator records the appeal as settled under section 54 TMA at that figure.

Practical points from the guidance: bring the people who can say yes, read HMRC’s Litigation and Settlement Strategy beforehand (ADRG02600), assume anything factual you say is on the record, and keep notes to a minimum during joint sessions so you can listen. For background on the service, see our guide to HMRC ADR and statutory review or ADR.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.