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BDO ADR mini series, Episode 3: It's crunch time

1st Apr 2014
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It’s crunch time, according to the title of the latest episode in our five-part BDO alternative dispute resolution (ADR) video mini-series.

This week, we have reached the bargaining phase of Mr and Mrs Spencer-Smith’s tax mediation day with the Revenue, over a dispute that has run for three-and-a-half years. 

In the last episode, viewers got an in-depth insight into the exploration phase of mediation day, in which mediator Anstey Thomas, asked some open questions to get both the Revenue and clients to explore the issues in more detail.

Once this has been completed and all involved have had a break for lunch, the fourth stage of the process can begin.

“The mediator will start to increase the intensity of the process and the day,” explained BDO tax investigator and Centre for Dispute Resolution (CEDR) accredited mediator, Dawn Register.

“Anstey will be more challenging and both sides will be starting to think about possible solutions and whether they will be able to realistically settle this in one day,” she added. 

The process in the bargaining phase will focus on the mediator taking a more ‘active’ role, and trying to get reasonable offers from both sides.

As Thomas explains, her role is now to pick out unrealistic offers and challenge these - giving both sides reality checks to move the process on “much quicker”.

Thomas returns to Mr and Mrs Spencer-Smith’s mediation room. She begins by asking them about the issues that are holding the process up; namely the extension cost, a deceased person on the payroll and quite large travel expenses, which they claim are for business purposes.

The Spencer-Smiths make their offer to HMRC, but Thomas encourages them to be more realistic and to speculate whether HMRC would accept it, by asking them to put themselves in the Revenue’s shoes.

One of the tactics she uses is to leave the room to allow the clients to reflect, a “powerful statement without saying anything” according to Register.

Thomas then brings Mr and Mrs Spencer-Smith’s revised offer to HMRC - but will they accept or reject it?

Watch the video, featured above, to find out more, including a revelation about Mr Blood.

Interesting dispute fact: Last week, we asked you what your assessment of the case against the Spencer-Smiths was. Nearly 60% said it was "a clear instance of reliefs claimed on unallowable expenses" and a further 42% said there were "some grey areas that could fruitfully be explored through mediation". 

Now answer our poll below: 

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