Litigation and settlements strategy (LSS) - updated
16 July 2011 in General, Investigations The Litigation and Settlements Strategy (LSS) was first published by HMRC in 2007, and represents a statement of principles applied by HMRC in its approach to the resolution of taxpayer disputes.
The "refreshed" version of the LSS, published in July 2011, can be downloaded here.
It remains noteworthy that a policy statement which underpins the entirety of HMRC's relationship with its "customers" continues to be given such a low-key presence on the HMRC website. The relevant section on the website is tucked away here and (although hardly a new or isolated allegation) is nigh on impossible to find unless you know precisely what to look for, and where. A cynic might be inclined to suggest that HMRC are really not that keen on advertising the LSS to its customers, or their agents, except when it suits HMRC.
Whilst not being without some good points, it is difficult to claim the LSS has been a roaring success when there are now probably more disputes awaiting resolution that at any time in recent history.
In practice, since its issue, the LSS has given certain officers, and certain specialist departments, of HMRC, a blunt tool to be used, or abused, when too often holding out for a nuisance settlement.
It is, on the one hand, unfortunate that HMRC are able to take a weak case and inappropriately use the prospect of litigation to coerce a taxpayer into submission in circumsances where it is far from clear that the law is in favour of HMRC.
But, on the other hand, it is not uncommon for such taxpayers to be represented by agents who are, quite frankly, ill-equipped for the task when not being familiar with the content of the LSS that can, on occasion, be a highly valuable tool in forcing HMRC to back down when HMRC has advanced, or is maintaining, a suspect approach to interpreting the law or its application to the facts of a particular case.
To this end, the refreshed LSS continues to contain much useful content which can sensibly be used, whether as a sword or shield, when seeking to resolve efficiently a dispute, of pretty much any type whatsoever, with HMRC.