HMRC's Litigation and Settlement Strategy (LSS)

HMRC's litigation and settlement strategy (LSS) is its internal guidance on handling tax disputes and is a worthwhile read if you find yourself involved in a tax dispute

The two key elements of HMRC's approach to dealing with tax disputes are:

  • supporting customers to get their tax right first time, so preventing a dispute arising in the first place; and
  • resolving those disputes that do arise in a way that establishes the right tax due at the least cost to HMRC and to its customers, which in most cases will involve working collaboratively.

The LSS encourages HMRC staff to:

  • minimise the scope for disputes and seek non-confrontational solutions;
  • base case selection and handling on what best closes the tax gap;
  • resolve tax disputes consistently with HMRC’s considered view of the law;
  • subject to that, handle and resolve disputes cost-effectively – based on the wider impact or value of cases across the tax system and across HMRC’s customer base;
  • ensure that the revenue flows potentially involved make any dispute worthwhile;
  • (in strong cases) settle for the full amount HMRC believes the tribunal or courts would determine, or otherwise litigate;
  • (in ‘all-or-nothing’ cases) not split the difference;
  • (in weak or non-worthwhile cases) concede rather than pursue.

For more information, visit the 'Related links' section on this page.