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BDO ADR mini series Episode 4: Series Finale

15th Apr 2014
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After 10 weeks of following HMRC and clients Mr and Mrs Spencer-Smith through their tax dispute mediation day, we've finally reached our series finale: signing the settlement agreement. 

After going through an intensive day getting to grips with the issues at hand and negotiating a viable solution, Revenue inspectors Mr Blood and Mr Gain re-join mediator Anstey Thomas and the taxpayers in a communal room. 

In this case, an agreement is reached after a heated bargaining process, which you can view in episode three.

As this week’s video revisits important moments from the last four episodes, the difference the day has made in terms of the taxpayers' and HMRC's attitude towards the process and each another is highlighted. 

"At this stage, we are looking at details of the settlement agreement, what the specific tax points are, solutions to each of the issues discussed and what this means in terms of the amount of tax, interest and penalties due," BDO tax director and Centre for Dispute Resolution (CEDR) accredited mediator, Dawn Register, comments. 

A poignant moment is reached after the settlement agreement is signed, in which Mrs Spencer-Smith pulls a chequebook from her bag to make a payment of the tax due. 

"This is a key driver for this whole programme," Register adds. "Using mediation to resolve disputes is actually getting the tax that has been postponed paid to HMRC."

Although a positive outcome,” she added, “making a tax payment to HMRC, even if it means resolving a long-running dispute, is not done with joy by the taxpayer.”

“Perhaps even the inspector feels they could have got more tax out of the taxpayer, had they taken them to court,” she surmised further. 

But there is an overarching air of relief within the video - and of course, Mr Spencer-Smith has to have the last word. 

"We’ve reached a resolution, but I’d like to emphasise… they haven't actually won," he said, after handing over his cheque. 

Mr Blood would disagree, however: "At the end of the day, we won," he tells the camera smilingly as he heads off for retirement. 

"There are lots of ways to resolve a dispute with HMRC," Register said in conclusion to the series. 

"If used effectively, [ADR] can be cost effective and time-saving way of resolving the backlog of enquiries." 

For more in this series, see: 

Interesting dispute fact: Last week, we asked you what way of settling tax disputes you had found most effective. Nearly 56% said having both sides settle informally was successful for them, closely followed by none - we're looking for new ideas (22%). 

Now answer our poll below: 

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