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RIP LSS

It is reported (see link) that HMRC are to change the way they approach tax disputes, effectively abandoning the "Litigation and Support Strategy" ("LSS") which they rolled out as recently as 2007. At that time their expressed policy was not to negotiate: they said "Where a dispute arises from an all-or-nothing legal point, settlement terms should also be based on all-or-nothing figures. There should be no compromise where our arguments are strong: equally, we will not hold out for low-value settlements if our arguments are not strong enough to support litigation, or if the issue is one that does not justify the use of litigation in the absence of agreement."

In the real world, interpretation of legislation is seldom without doubt, and a strategy which pretended otherwise was always going to be difficult to implement. HMRC's head man Dave Hartnett is now reported as criticising his staff for being "sometimes too black and white about the law" (which seems a bit rich given the express terms of the LSS!) and they are now to be instructed to enter into negotiations more widely.

What does this mean for clients? Hopefully, quicker resolution of disputes on realistic terms and less risk of having to go to court to prove your case. So thumbs up from us to the ditching of the LSS.