The number of Alternative Dispute Resolution (ADR) cases exceeding HM Revenue & Custom’s (HMRC) four-month resolution target has more than doubled over the past year, according to analysis by BCLP, the international law firm.
According to data obtained by BCLP from HMRC, 222 ADR cases took four months or longer to resolve in 2024/25 (43% of the total) up from 87 cases the previous year (24% of the total).
BCLP explains that ADR is a voluntary process designed to help resolve tax disputes without the need for formal litigation. It involves a trained HMRC mediator – someone not previously involved in the case – who facilitates discussions between the taxpayer (or their representative) and the HMRC officer handling the dispute. The aim is to resolve disputes within four months of receiving applications for ADR.
BCLP points out that in May 2025 the First-tier Tribunal (Tax Chamber) issued an updated practice statement on the use of ADR in tax appeals. The Tribunal explicitly reminded taxpayers to consider ADR to avoid a hearing and that unreasonable refusal to engage in ADR could now influence cost awards, especially in complex cases.
Kate Ison, Partner at BCLP, comments: “ADR can be an effective means of resolving tax disputes and its promotion by the Tribunal is a very positive step forward. However, the sharp rise in both case volume and the length of time to resolve disputes raises questions as to whether the ADR system will be able to cope with increased demand – just as the tax tribunal is actively encouraging its greater use.”
The tax tribunal is still managing a backlog of approximately 50,000 unresolved cases. The intention is to encourage greater use of ADR as a release valve for the tribunal system but unless additional resources are dedicated to ADR from within HMRC, taxpayers may face worsening bottlenecks.”
Number of ADR cases exceeding HMRC’s four-month resolution target
Total number of cases accepted into ADR
