CIOT voices concerns over Finance Bill 2002

The Chartered Institute of Taxation (CIOT) has said it has 'growing concerns over the Government's attempts to make significant tax changes without full Parliamentary scrutiny.'

Having considered the Finance Bill in detail, the third longest in history at 488 pages, the Institute listed the following areas as its key concerns:

• Clause 22 - Disallowance of input tax where consideration not paid;

It said: 'As drafted, this clause imposes an onerous compliance burden on taxpayers. We have suggested a number of changes including a yearly adjustment for small and medium-sized businesses.

• Clause 23 - Flat-rate scheme for small businesses;

It said: 'While we welcome the new flat-rate scheme as a means of reducing the compliance burdens of small businesses, we regret that it does nothing to ameliorate the "cliff-edge" problem arising when they cross the registration threshold.

• Clause 132 - Mandatory e-filing;

It said: 'There should be a de minimis level for employers who do not have e-filing capability. The Government should encourage, not compel. In no circumstances should the proposed regulations extend beyond employers and, as noted above, the trend to legislate by regulation should be resisted.'

Penny Hamilton, the new President of the CIOT, said: "We believe that tax law should be made by Parliament, and properly debated there. The current Finance Bill includes a number of clauses which give the Inland Revenue, or Customs and Excise, powers to make detailed regulations for matters such as mandatory e-filing and the imposition of additional VAT compliance burdens. Such regulations are not subject to any form of consultation, and will become law automatically unless an MP specifically objects to them. Under this procedure, there is no possibility of debating or amending the individual regulations, which is, no doubt, why it is a popular way of introducing detailed legislation."

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Richard Powell, UKTECH