Call for independent tax review
A respected tax body has criticised a review of HM Revenue & Customs (HMRC) powers by its own Department and is calling for an independent commission to consider the tax authority's powers.
This is part of the Chartered Institute of Taxation's (CIOT) response to a consultation paper, "HM Revenue & Customs and the Taxpayer: Modernising powers, deterrents and safeguards" issued in March.
Inappropriate
John Cullinane, CIOT president, said: "We believe it is fundamentally inappropriate for HMRC's powers to be reviewed by the Department's own consultation process. HMRC is a law enforcement arm of the State and, with the best will in the world, cannot produce a balanced report on this issue because of its particular interest in the outcome. An independent commission should consider whether it needs extra powers, and, if so, what those powers should be."
The CIOT is particularly concerned that the current consultation process does not consider, or does not consider adequately, the following fundamental principles:
- The rights of taxpayers
- The need for certainty
- The importance of simplicity.
It also does not take as its starting point the basic human rights of taxpayers as laid down by the Human Rights Act.
Mr Cullinane added: "Compliance with the rules is very difficult for ordinary people because the tax system is complex and lacks clarity. The commission's terms of reference should thus consider these important issues of complexity and uncertainty, as well as providing for appropriate rights of appeal against HMRC decisions."
An organisation to fear
The CIOT response to the consultation document says: "We believe that, if the review is unbalanced, with an increase in HMRC powers and no counterbalancing rights for taxpayers, there is a serious risk that the existing public attitude to the Department might change.
"If powers increase over time HMRC may be viewed as an organisation to fear. The helpful side of the organisation - that HMRC wishes to convey to compliant individuals - may not be appreciated by the general public in these circumstances. Professional advisers will become more wary and cautious than they are now, and this will impact on the agent-client and the HMRC-agent relationship, to the detriment of all."