Disagreeing with HMRC doesn’t automatically mean you’re wrong — or that the case is lost.

Here are the most common questions people ask when they find themselves in dispute with HMRC.

What is HMRC dispute resolution?

HMRC dispute resolution is the process of resolving disagreements between taxpayers and HMRC.

It can involve disagreements about:

• The amount of tax owed
• Penalties applied
• The interpretation of tax law
• Income tax, CGT, VAT, PAYE, corporation tax, IHT  

Resolution can happen informally through discussion, formally via Alternative Dispute Resolution (ADR), or — in more complex cases — through appeal or tribunal.

What are the most common types of disputes with HMRC?

Typical disputes include:

• Disagreements over tax calculations or assessments
• Penalties for late submissions or inaccuracies
• VAT errors or classification issues
• Employment status disputes (self-employed vs employed)
• R&D tax credit claims questioned or rejected
• CIS deductions and subcontractor tax issues
• COP8 or COP9-related tax liabilities

These can range from minor errors to complex technical disagreements involving large sums.

What happens when I dispute an HMRC decision?

When you challenge HMRC’s decision:

• HMRC reviews your explanation and evidence.
• They may request more documents or clarification.
• If you still disagree, you can request independent review by another HMRC officer not previously involved.
• If the dispute remains unresolved, you can move to Alternative Dispute Resolution (ADR) or appeal to the Tax Tribunal.

Most disputes can be resolved before reaching tribunal level if handled correctly.

What is Alternative Dispute Resolution (ADR)?

ADR is a voluntary process where an independent HMRC mediator helps both sides reach an agreement.

It’s often used when:

• There’s a communication breakdown with HMRC
• You believe key evidence wasn’t considered
• You need a neutral viewpoint to move forward

ADR is faster, cheaper, and less stressful than a formal tribunal, and it can preserve your working relationship with HMRC.

How long does HMRC dispute resolution take?

Timeframes depend on the complexity and route taken:

• Simple reviews or clarifications: a few weeks to 3 months
• Independent review: typically 45 days
• ADR cases: usually resolved within 6–12 months
• Tribunal cases: can take over a year

Keep in mind — preparing supporting evidence, tax records, and professional submissions takes time too. Well-prepared documentation often shortens the process significantly.

What documents do I need for a dispute resolution?

HMRC expects full evidence to support your position, such as:

• Tax returns and accounts
• Invoices, receipts, or bank statements
• Correspondence with HMRC
• Legal or professional advice letters
• Payroll or VAT records
• Evidence to support your case

Having clear and complete documentation is one of the strongest factors in resolving a dispute successfully.

Can I resolve a dispute without going to court?

Yes — in fact, most disputes never reach tribunal.

Many are settled through:

• Direct negotiation with HMRC officers
• Independent review
• ADR mediation

A tribunal is usually the last resort, used only if all other routes fail.

Do I need a professional adviser?

Yes, and it’s strongly recommended.

A specialist tax adviser experienced in HMRC disputes can:

• Review your case and identify weaknesses or errors
• Draft formal responses and submissions
• Communicate with HMRC professionally
• Represent you in ADR or at tribunal if needed

Professional representation often leads to faster resolution and reduced penalties.

Can I dispute penalties as well as tax assessments?

Absolutely. Penalties can be challenged or reduced if you can show:

• You took reasonable care
• The error was unintentional or due to circumstances beyond your control
• You acted promptly to correct mistakes

HMRC often reviews penalty levels if there’s clear evidence of cooperation and transparency.

What if I lose the dispute?

If you lose a dispute or tribunal case, you may:

• Need to pay the assessed tax and penalties
• Face additional costs if the case continued unnecessarily

However, you may still have appeal options if new evidence arises or the decision appears legally flawed.

The best way to avoid this outcome is to prepare thoroughly and seek advice early.