In the event of an unsuccessful ADR and no further evidence coming to light, the case will be heard before the first tier tax tribunal. The process at this stage is relatively straightforward.
Both HMRC and the contractor’s advisor will prepare evidence to present to the tribunal judge. HMRC’s representative (usually an inspector specialising in appeal hearings) and the contractor’s advisor make their case to the judge.
Either can introduce witnesses to provide and support evidence, whom the judge can question.
It can be months before the judge issues a ruling based on the evidence presented during the tribunal. Both the contractor and HMRC can appeal this decision which will take the case to the upper tax tribunal where the process is repeated, often accompanied by additional evidence or witnesses.
In extreme cases, the case may proceed to a higher court.