CIOT says HMRC power grab is a step too far

Released 9 January 2019

The Chartered Institute of Taxation (CIOT) agrees with the House of Lords economic affairs committee call for a new review of HMRC powers.

Whilst HMRC need substantial powers to enable it to collect the taxes due to it, the Institute has expressed concern that every year one or more Finance Acts extends these powers further - the proposal in this year’s Finance Bill 2018-19 (FB 2018-19) for an extension of offshore time limits being a case in point.

In a recent article on HMRC powers, John Cullinane CTA, tax policy director at the CIOT says that strong powers to tackle offshore evasion are justified, but HMRC can already go back 20 years where there is evidence of concealment or dishonesty. The latest HMRC power grab is a measure is about non-deliberate errors and carelessness. Mr Cullinane goes on to say that ‘it comes at a time when HMRC has access to a bigger armoury than ever before to deal with offshore non-compliance. They are receiving huge amounts of taxpayer data from other tax jurisdictions through automatic exchange of tax information agreements. It has shown off the powerful internal systems it now has to analyse this data such as HMRC Connect and its successors.

Given all this, a 12-year time limit that can apply even where a taxpayer has taken reasonable care with their tax affairs does not strike the right balance between the public interest in collecting the right amount of tax, and the right of honest taxpayers to finality in their tax position after a reasonable period of time.

The Lords are right to ask the government to think again on this proposal’.

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