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Suppose Inland Revenue (IR) disagrees with a tax return that your business has filed, or your business disagrees with an assessment made by Inland Revenue. In that case, you may have to engage in a disputes process. If you cannot reach an agreement earlier in the disputes process, your case may be referred to the Disputes Review Unit. This article will outline:

  • what the Disputes Review Unit is;
  • how it operates; and
  • the outcome of the Disputes Review Unit, or an adjudication report. 

What is the Disputes Review Unit?

The Disputes Review Unit is an impartial body part of Inland Revenue’s National Office and the Office of the Chief Tax Counsel. It was created to provide an impartial, objective and fresh view to cases going through Inland Revenue’s dispute process. However, it does not perform a mediation, arbitration or inquisitorial function. Instead it comes to a conclusion based on the materials and evidence presented by the parties involved. 

How Does it Operate?

If Inland Revenue disagrees with a tax return that your business has filed, or you disagree with an Inland Revenue tax assessment, you will have to engage in a dispute process. Before your case is referred to the Disputes Review Unit, you will have to complete an array of documentation. For instance, one such document is a statement of position or an SOP. This SOP must include:

  • the facts that support your business’ view;
  • the questions that you believe need an answer to resolve the dispute; and
  • why you think your business’ view is correct.

Inland Revenue will also have to issue a statement of position. Once you and Inland Revenue have filed your SOPs, your case will be referred to the Disputes Review Unit. After that, a team of three individuals will consider your dispute, who each have:

  • professional legal or accounting qualifications; and
  • experience in researching and analysing tax issues. 

This group of three is called the adjudication team. 

The adjudication team will usually be allocated your case within a week from when it was first referred to them. Your adjudication team will consider the SOPs that your business and Inland Revenue submits, alongside other documents, such as IR’s notice of proposed adjustment and your notice of response. The team will review the following in reaching its final outcome:

  • key facts;
  • any evidence presented;
  • points of law or legal principles; and 
  • all issues raised. 

This adjudication team and a designated manager in the Disputes Review Unit reach the final decision. Once they decide, they will issue an adjudication report within three months of being allocated the case. 

What is an Adjudication Report?

The adjudication report is a comprehensive document that contains the:

  • final decision of the Disputes Review Unit. They can make this outcome either fully or partly in favour of your business or Inland Revenue;
  • reasons for that outcome. The report will also detail why they did not reach certain outcomes and why they did not accept particular arguments;
  • legal issues that needed to be resolved in your dispute;
  • analysis that was conducted when working through these legal issues;
  • application of this legal analysis to the facts of your case; and
  • final conclusions that were reached on each issue. 

The adjudication report can be a very lengthy document and may appear unnecessarily detailed. To assist in understanding the reasoning advanced in the adjudication report, you will also receive a report summary. However, the intent of the report is to provide an in-depth analysis of your case. This detail can assist both you and Inland Revenue in any decisions you make regarding the next steps in your dispute.

You may wish to use the points raised by the Disputes Review Unit to assist your case in a hearing with the Taxation Review Authority or the High Court. 

Key Takeaways

One key stage in a Commissioner-initiated or taxpayer-initiated disputes process is the Disputes Review Unit. It is an impartial body that will provide a fresh and objective view of your unresolved dispute. Additionally, your assigned adjudication team will review the facts, evidence, law and issues addressed in your statement of position, and Inland Revenue’s SOP, to reach a final outcome. Further, they will present this outcome in a comprehensive adjudication report. If your business requires assistance with a dispute with Inland Revenue, contact Legalvision’s disputes lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is the Disputes Review Unit?

It is an impartial body that reviews cases going through the Inland Revenue dispute process. 

What is an adjudication team?

An adjudication team is a group of three legal or accounting professionals assigned to each case that is referred to the Disputes Review Unit. 

What is the adjudication report?

The adjudication report is a comprehensive document that contains the Disputes Review Unit’s final outcome and reasonings.

Is the Disputes Review Unit a part of Inland Revenue?

It is part of Inland Revenue’s National Office. However, it is an impartial and independent body. 

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