SVM116200 - Case Selection, Handling and Settlement: Practice – Potential Litigation

At the first review and at every subsequent review the manager should consider whether a negotiated settlement on reasonable terms is likely to be achieved. It will always be preferable to settle a valuation without recourse to litigation, if a satisfactory outcome can be achieved.

If a negotiated settlement is unlikely a decision must be made whether the valuation is suitable for litigation. Factors to be taken into account before any decision to litigate is taken include:

• The amount of tax involved
• The precedent value of the matter in dispute
• The strength of HMRC’s case
• The risks of litigation
• The potential benefit of discouraging non- compliant behaviour in that taxpayer or others
• The costs of litigation

If a case looks as if it will require litigation to achieve a satisfactory settlement, you should refer the papers to the Appeals Team.