Budget 2020: HMRC automated orders given equal legal status

Automated penalty notices and orders to file self assessment tax returns are going to be given the same legal status as if they had been issued by an HMRC officer, reports Sara White

The clarification follows disputes over whether computer generated notices have the same legal status as notices delivered by a member of HMRC staff and clearly puts digital communications on a par.

This measure will apply both prospectively and retrospectively but does not introduce any new or additional obligations or liabilities for taxpayers, and will be included in Finance Bill 2020.

In essence, this does not change current procedures as such, but does recognise the increasing use of auto-generated messages to deal with tax problems, notifications and penalty notices, and will give these communications on a legal footing.

This is a technical change to confirm that processes used by HMRC to carry out certain functions, including the issue of notices to file self assessment tax returns and notices imposing a penalty for late filing of those returns, may be carried out using a computer or other means rather than an individual officer.

The policy note, issued along with the Budget 2020 papers, states: ‘This measure affirms that functions conferred on an officer of Revenue and Customs may be carried out by HMRC using an automated process or other means.

‘It will have no effect on individuals, partners and corporate bodies who are issued with a notice to file or on anyone issued with a late filing penalty notice. The measure does not introduce any new obligations or liabilities.’

The move was first announced by the government in a written ministerial statement on 31 October 2019, which stated the intention to legislate to put beyond doubt that certain statutory notices issued by HMRC computer systems or by other electronic means have the same force of law as those issued by an individual officer of HMRC.

HMRC relies on automated processes for routine tasks, which can be carried out using taxpayer data and parameters set by HMRC. ‘Automation is used where manually carrying out those tasks would be resource intensive and expensive,’ according to the policy paper.

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