Alternative dispute resolution is HMRC’s mediation process for tax disputes. A trained HMRC mediator works with you and the officer dealing with your case to find a way through, without taking over responsibility for the dispute. You can apply during an enquiry that has stalled, after an appealable decision, or during tribunal proceedings, and using ADR does not affect your right to appeal or to ask for a statutory review. HMRC responds to applications within 30 days, and meetings happen within 90 days of acceptance.

Most long-running enquiries are not deadlocked on law. They are deadlocked on facts, assumptions and a relationship that has soured. ADR exists for exactly that, and it is used less often than it should be, largely because people assume mediation is a concession. It is not: it is a faster way to find out what the dispute is actually about.

What ADR is

A mediator, trained in mediation skills and techniques, sits between you and the HMRC case officer. Their job is to get each side’s position understood, test where the evidence actually points, and find whether agreement is possible. The mediator does not decide the dispute and does not take it over: the parties keep ownership of the outcome.

When you can apply

Three windows. During a compliance check where progress has stalled. After HMRC has issued a decision, if you have appealed and had tribunal acknowledgement. And at any stage of tribunal proceedings. In each case, applying costs nothing in rights: appeal and statutory review positions are unaffected.

What it suits, and what it does not

ADR suits disputes about facts, evidence, assumptions and communication breakdowns: the enquiry where each side has stopped hearing the other. It is not available for complaints about HMRC conduct or delay, criminal investigations, debt recovery, tax credits, PAYE coding, penalties, or tribunal cases allocated to the paper or basic track.

The timescales

HMRC responds to an application within 30 days. If accepted, the parties commit to meeting within 90 days and to responding to requests within 15 working days. Those deadlines are part of the value: an enquiry that has drifted for a year acquires a calendar.

Why this matters to the cost of a dispute

Professional fees track elapsed time and correspondence rounds, and both collapse when a dispute moves from letters to a structured meeting. For an insured enquiry, ADR can be the difference between a claim that stays comfortably inside the policy limit and one that does not. For an uninsured one, it is simply the cheapest route to the same answer.

Common questions

Is the ADR mediator independent of HMRC?

The mediator is an HMRC person trained in mediation, working separately from the case team. They facilitate; they do not decide, and they do not take responsibility for the dispute.

Do I give up my appeal rights by trying ADR?

No. HMRC’s guidance states that ADR does not affect your right to appeal or to ask for a statutory review.

How quickly does ADR move?

A response to the application within 30 days, meetings within 90 days of acceptance, and both sides answering requests within 15 working days.

What disputes are excluded?

Complaints about HMRC conduct or delay, criminal investigations, debt recovery, tax credits, PAYE coding and penalty disputes, among others, plus tribunal cases on the paper or basic track.

Does tax fee protection insurance cover the cost of ADR?

Where the underlying enquiry is covered, the professional time spent preparing for and attending mediation is normally part of the defence costs. As ever, the wording decides.

Related guides

This page explains HMRC’s alternative dispute resolution process in general terms. It is not tax advice and does not describe the terms of any particular insurance policy.

Solar Insurance Services (Medway) Limited is registered in England and Wales, company number 05439438, and is authorised and regulated by the Financial Conduct Authority, firm reference number 459582.

Sources: HMRC guidance, Use alternative dispute resolution to settle a tax dispute (gov.uk).