Tax barrister denounces ‘assessment by computer program’

HM Revenue & Customs defended its transformation strategy after a tax barrister claimed that the move to a centralised administration, with liabilities assessed “according to computer program”, is detrimental to the rule of law.

My news story of March 6 for Tax Notes (paywall) is now reproduced in full with permission:

Tax Barrister Denounces ‘Assessment by Computer Program’ (PDF)

Old versions of tax law on government website – an update

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.

There are also some Acts for which Legislation.gov.uk provides only the original version – for technical reasons, according to the website.

I’ve discussed this lack of progress with The National Archives. “Expert participants”, mainly from the public sector, are helping to update the legislation and have “substantially increased the resources we have available to update legislation”, a spokesperson said. Continue reading

HMRC guidance points to old tax law

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

Tax is really complex, but where is the law?

The Scottish budget has heaped more complexity on an already complex income tax system. There are to be two new rates for taxpayers on low and middle incomes.

Already, a UK taxpayer may have income that is charged at default rates, savings rates and Scottish rates. These rates include:

the default basic rate, the default higher rate, the default additional rate, the savings basic rate, the savings higher rate, the savings additional rate, the starting rate for savings, the savings nil rate, the dividend nil rate, the dividend ordinary rate, the dividend upper rate, and the dividend additional rate …

That list is drawn from a quick look at sections 6 to 16 of the Income Tax Act 2007, as revised, published in Tolley’s Yellow Tax Handbook. (Other handbooks are available.) Continue reading

The September finance bill: an overview

While this week’s Paradise Papers revelations have rekindled the public debate and added pressure for further action to deter tax avoidance and evasion, for many businesses and tax advisers the immediate concern is keeping on top of changes already announced.

The second finance bill of 2017 has now completed its House of Commons stages, and will be considered ­– although it cannot be amended – by the House of Lords on 15 November, just a week before the chancellor is set to deliver his autumn budget. Consultation on several measures to be included in the next finance bill closed on 25 October …

My article for AAT Comment, November 7

Consistent application of UK law under threat, Lords committee says

Experts have warned that the complexity of U.K. tax law poses a threat to lawyers’ and judges’ ability to apply it consistently, a House of Lords committee reported, a day after a government minister praised lawmakers’ rapid progress in examining the current, 665-page finance bill.

Experts have warned that the complexity of UK tax law poses a threat to lawyers’ and judges’ ability to apply it consistently, a House of Lords committee reported, a day after a government minister praised lawmakers’ rapid progress in examining the current, 665-page finance bill. The House of Lords Constitution Committee called for changes to the way legislation is developed to enable thorough parliamentary scrutiny and improve the quality of law. Legislation should be made more accessible and easier to understand for both practitioners and the public, the committee said in an October 25 release …

… Members of a public bill committee “rocketed through” the current finance bill efficiently and “in near-record time,” Financial Secretary to the Treasury Mel Stride remarked as the committee completed its examination of the bill ahead of schedule on October 24. Read more:

My news story for Tax Analysts, October 27 (paywall)

Preparing better legislation: Lords call for changes to law-making

Brexit bill ‘unclear in scope and effect,’ UK tax body says

The “abuse of rights” principle against artificial VAT avoidance could be removed retrospectively by the UK’s Brexit bill as currently drafted, and the apparent error illustrates how the bill goes “beyond what seems necessary” to leave the European Union, according to the Chartered Institute of Taxation.

“The government has been clear that its intention is to provide legal continuity during Brexit by copying over the entire body of EU law onto the UK’s post-exit statute book. This is a sensible aim,” said Jeremy Woolf, chair of the CIOT’s EU and human rights subcommittee, in an October 25 release. “However, as currently drafted, it appears to us that this will not be the case …” Read more:

My news story for Tax Analysts, October 26 (paywall)