The tax authority is launching an alternative for small businesses and individuals to resolve disputes with HMRC.

The Alternative Dispute Resolution (ADR) service uses independent HMRC facilitators from its Local Compliance SME and Local Compliance Individuals and Public Bodies business units to resolve disputes between HMRC and customers during a compliance check.

The ADR, which covers both VAT and direct tax disputes, aims to find a fair and quick outcome for both parties, helping to reduce their costs and avoid a tribunal.

HMRC says the new services, which comes after a two-year trial and extensive consultation with professional bodies and the voluntary sector, will not affect the taxpayer's existing review and appeal rights.

Although the new service will not guarantee resolution of the dispute but says that by the end of the process, taxpayers will have clarity on the outstanding issues and what happens next.

Richard Summersgill, HMRC director of local compliance, said: 'I am delighted to announce that Alternative Dispute Resolution for small businesses and individuals has entered mainstream HMRC business.

'We know that taxpayers like the speed and flexibility of Alternative Dispute Resolution and evidence has shown that by using the simple service, many disputes can be significantly shortened and resolved without recourse to Tribunal.'

ADR is available to small business and individual taxpayers where a tax issue is in dispute, whether or not an appealable tax decision or assessment has been made by HMRC.

For more information on ADR, including how to apply for the process, click HERE