Mala Kapacee runs the rule over HMRC’s efforts to improve dispute resolution.
HMRC recently issued a consultation on improvements to the dispute resolution process (closed on 7 July 2025) suggesting ways of streamlining the process. According to the consultation, 12,368 appeals were sent to Tribunal in the year to 31 March 2024. In that year, there were 47,250 appeals in progress and only 1,500 were decided. Looking at these figures it is clear there is a huge backlog of cases in the court system, and it is in everyone’s interest to streamline the dispute resolution process.
With more and more taxpayers drawn into filing tax returns, more people are going to come under enquiry. Further, financial crime has increased in complexity over the past 20 years, with more complex financial systems, more international organised crime, cryptocurrency and – dare I say it – AI. Unfortunately, the crime fighting forces have not moved at the same rate as the technology or the criminals.
Over the years, HMRC has developed different approaches to prevent and address tax fraud (e.g. nudge letters, addressing MTIC fraud at its source by tightening up registration rules and working with the insolvency service to disqualify directors). However, any government body working within the law will always be playing catch up to those evading taxes, whether tax evasion is part of a wider criminal network or whether it is the end goal.
In order to move resources towards the more serious and higher value tax evasion, HMRC must find efficient and effective means of resolving the lower value, simpler interventions where taxpayers are looking for closure. At the moment, HMRC appears to focus on the ‘smaller fish’ and this is likely to be a resourcing issue (more staff are needed for more complex cases) and because the smaller fish do not always have the resources to fight back.
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