Release: Immediate: Tuesday 23 July 2019
Tax advisers welcome additional scrutiny of HMRC powers
The Chartered Institute of Taxation has welcomed the announcement of a series of measures designed to strengthen public trust in HMRC’s exercise of their statutory powers.
A new professional standards committee, advised by independent experts, to advise HMRC on their use of statutory powers;
A post-implementation evaluation of the HMRC powers and safeguards introduced since 2012;
A comprehensive review of the findings identified in the 2019 Adjudicator’s report;
HMRC to publish more data and information about the exercise of their powers, including their debt management, registrations and repayment services;
HMRC to report on the effectiveness of the work of their extra support service;
HMRC to review taxpayers’ experiences during compliance enquiries.
These proposals come largely in response to a report from a House of Lords committee2 published in December 2018.
CIOT President Glyn Fullelove said:
“This is a welcome set of announcements from the Financial Secretary, that shows the government are listening to parliamentarians, the tax profession and others. We are optimistic it will lead to stronger safeguards against misuse of HMRC powers and strengthen public trust in the tax authority.
“HMRC’s powers permit them to carry out a broad range of actions and activities, such as undertaking compliance checks, obtaining and providing information and documents, making decisions, raising assessments and applying interest and penalties. This is as it needs to be, but it is also essential that these powers are exercised responsibly, with effective oversight and with adequate safeguards.
“Many have argued the case for greater scrutiny of HMRC. The House of Lords committee asked the government ‘to consider the establishment of an independent body to scrutinise the operations of HMRC.’ The proposed professional standards committee is by its nature a compromise – a consultative rather than supervisory body, not independent of HMRC but advised by independent experts. It will no doubt disappoint some but we prefer to see it as a positive step which has the potential to play a useful role in maintaining public confidence in HMRC’s use of their extensive powers.
“Interestingly calls for outside scrutiny have come both from those who believe HMRC are too aggressive in their use of powers and from those who fear that they are not bearing down hard enough on some taxpayers. The balance struck by the law, and within its area of discretion by HMRC itself, has never been of greater political interest than today. That is the context in which this announcement must be seen.”
On the proposal for a post-implementation review of the powers since 2012, Glyn Fullelove said:
“This review is much needed and we look forward to contributing to it.
“The constant flow of new and strengthened powers to HMRC over the last seven years has not allowed for anything like sufficient evaluation of their overall efficacy. The needs for early and full consultation on new measures and for effective and routine post-legislative review of whether measures are achieving their objectives were central recommendations of the Better Budgets report3 published by the CIOT, Institute for Fiscal Studies and Institute for Government. This was a point we stressed in our evidence to the Lords committee.
“Once this post-implementation review has been conducted, its findings should, within the next few years, be fed into a full review of HMRC’s powers and safeguards. The transition to digital is transforming tax administration; the nature and operation of HMRC’s powers needs to reflect this fundamental change. The last comprehensive powers review took place before this digital transformation was under way.”
Finally, Glyn Fullelove added
“We particularly welcome the commitment to collaborative working with professional bodies that runs through the announcements. The CIOT has been pleased to be involved with the initial stages of the review of taxpayers’ experiences during compliance enquiries mentioned by the Minister. To date this has been a constructive and positive engagement.”
Notes for editors
1. Ministerial written statement on HMRC Powers and Taxpayer Safeguards, 22/7/19
2. The Powers of HMRC: Treating Taxpayers Fairly, House of Lords Economic Affairs Committee Finance Bill Sub-committee report, 4/12/18
3. Better Budgets, published by Chartered Institute of Taxation, Institute for Fiscal Studies, Institute for Government, 16/1/17
4. The Chartered Institute of Taxation (CIOT)
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 18,400 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
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