HM Revenue & Customs seems eager to litigate rather than accept reasonable arguments in tax disputes, even when the prospects of success are “less than 50 per cent,” according to the Chartered Institute of Taxation. The “unwelcome trend” is adding to a growing backlog of appeals for tax tribunals, the CIOT said in response to the House of Commons Treasury Subcommittee’s inquiry into the conduct of tax investigations and the resolution of tax disputes.
My news story of July 6 for Tax Notes (paywall) is now reproduced in full with permission:
HMRC’s Approach to Disputes Worsens Backlog, Tax Bodies Say (pdf)
As I reported, HMRC officials and CIOT president Ray McCann were scheduled to give evidence to the subcommittee’s inquiry on July 9. The evidence session was postponed following the resignations of Brexit secretary David Davis and foreign secretary Boris Johnson over the July 6 Chequers agreement:
Misunderstandings remain about UK taxation of savings income, but a personal tax roadmap would help address its significant complexities, the Office of Tax Simplification said last month.
A range of tax reliefs to encourage saving works well for most taxpayers, and 95 percent of people pay no tax on savings income, the OTS said. But the interaction between rates and allowances is so complex that HMRC’s self-assessment computer software has sometimes “failed to get it right,” the OTS pointed out in a 50-page report titled Savings Income: Routes to Simplification.
My news story of May 29 for Tax Notes (paywall) is now reproduced in full with permission: U.K. Office of Tax Simplification Calls for Personal Tax Roadmap (pdf).
Last week HM Revenue & Customs apologised for linking to some very old legislation, in a guidance note on new criminal offences, and removed the offending links. HMRC guidance at GOV.UK does not normally include statutory references, but if that is going to change there is a clear risk that the same mistake will be made again.
Legislation.gov.uk is described as “the official place of publication for newly enacted legislation”. Great care is needed in relation to older tax legislation, including some of the major consolidation Acts.
For example, go to Income Tax Act 2007 and you’ll see a prominent warning about an apparently very large number of changes that have not yet been processed. Continue reading “Old versions of tax law on government website – an update”
You can find out about criminal offences relating to offshore income and assets in a new guidance note on HMRC’s website. But the guidance points to some very old tax law.
While HMRC guidance for taxpayers published on GOV.UK does not normally include statutory references, this guidance note has six.
At the time of writing, there are links to sections 7 and 8 of the Taxes Management Act 1970 as reproduced at Legislation.gov.uk, the “official place of publication for newly enacted legislation”.
UPDATE 22 March: HMRC has deleted the links to sections 7 and 8 and apologised for the error.
The problem is that while some progress has been made in processing changes enacted in annual finance acts, Legislation.gov.uk still presents the original versions of some of the key consolidation acts. The original TMA 1970, which turned 48 last week, is here. Continue reading “HMRC guidance points to old tax law”
HM Revenue & Customs estimates the total UK tax gap, the difference between the tax collected and the amount that should be collected “in theory”, at £34bn. Just £1.7bn relates to avoidance (excluding international tax planning strategies such as profit shifting, which are being addressed slowly but multilaterally), and £6bn relates to interpretation of the law.
In contrast, criminal attacks account for around £5bn and evasion another £5bn, while £3.5bn is attributed to the “hidden economy”.
Read more: My article for AAT Comment, 12 January
HM Revenue & Customs will recruit up to 5,000 additional staff in 2018, the UK government said less than a week after HMRC Chief Executive and Permanent Secretary Jon Thompson told a parliamentary committee that the department was planning to review its priorities in the light of uncertainty created by Brexit …
“Alongside the negotiations in Brussels, it is crucial that we are putting our own domestic preparations in place so that we are ready at the point that we leave the EU,” a spokesman for Prime Minister Theresa May said after [an October 31 cabinet meeting]. “Cabinet heard many of these will be needed even in our preferred scenario of a bold and ambitious deal — for example, implementing either of our proposed customs arrangements will require investment in new systems and customs officers by HMRC.” Read more:
My news story for Tax Analysts, November 1 ($)
A shift in the public debate is needed to ensure that everybody sees tax evasion as unacceptable, a leading UK tax expert said after official figures suggested that avoidance accounted for £1.7bn of a £34bn tax gap.
HM Revenue & Customs estimated that evasion, criminal attacks, and the hidden economy together accounted for £13.8bn, and error and non-payment for £6.4bn. Losses arising from differences in interpretation of the law accounted for £6bn, and failure to take reasonable care accounted for £6.1bn …
My news story for Tax Analysts, October 30 ($)
HMRC: Measuring tax gaps
HM Revenue & Customs will review its priorities early next year and may need up to 5,000 additional staff to secure successful delivery of a new customs service if the UK leaves the European Union without a customs agreement, according to HMRC Chief Executive and Permanent Secretary Jon Thompson.
Announcing on October 12 an inquiry into Brexit and the future of customs, the House of Commons Public Accounts Committee noted that HMRC was due to complete a five-year program for a new customs declaration service (CDS) by early 2017. Delays have meant that the CDS will not be fully operational until January 2019. Significant work is still required to meet the revised target, a National Audit Office report found in July …
My news story for Tax Analysts, October 30 ($)
Public accounts committee, oral evidence: Brexit and the Future of Customs