HM Revenue and Customs is to soften its stance in resolving tax disputes with businesses in a bid to unlock billions tied up in court battles over avoidance, according to the Financial Times.
Dave Harnett, permanent secretary for tax at HMRC, told the paper that officials had sometimes been too 'tough' in disputes over tax assessments. 'HMRC is packed full of very intelligent people, but we are sometimes too black-and-white about the law,' he said.
HMRC's new approach is focused on businesses rather than individuals. Harnett said its litigation strategy introduced in 2007 had sometimes been misunderstood. 'I think we got it a bit wrong in the way we explained it to people. They thought it was a great sword of justice.'
The Financial Times said that HMRC will be asked to reach agreements where amounts of tax owed could vary depending on different legal interpretations, and that the Revenue is planning a pilot project to test the use of third-party mediation in some cases.