Concern over powers for merged Revenue/Customs

The Tax Faculty has described the latest customer guidance on the new merged Revenue and Customs Departments (HMRC) as 'not adequate or effective' and raised particular concerns about the powers which could be available across the board.

The Tax Faculty, part of the Institute of Chartered Accountants, claimed the draft Advice Note was unclear who it is aimed at or how it will be used, and is not likely to be easily understood by the non-specialist reader.

It is also critical of the insufficient coverage of taxpayers' rights, and expressed concerns about some of the statements made about powers, for example, on the subject of meetings.

Powers

The whole question of HMRC rights and powers is to be the subject of detailed consultation - and controversy. An announcement relating to the consultation was expected in January 2005 but which is still awaited. This will look at aligning powers for the future, whereas the HMRC Bill currently going through Parliament is intended to preserve the status quo.

One particular bone of contention to date has been whether the Revenue will inherit some of the more forceful powers currently with Customs, such as the right to enter premises.

The Advice Note says that all HMRC officers will be authorised to use all powers available to HMRC, not just those powers that each specific officer enjoyed as part of either Customs or the Revenue and that a single officer of HMRC may want to inspect records relating to a number of different taxes at one time or, alternatively, different specialists will review different taxes at the same time.

The Tax Faculty, in its official response to the Advice Note, said: "We are concerned that this approach could lead to problems or misunderstandings where rules attaching to one tax are different from those for another tax.

"It is essential that this be properly controlled, and we would welcome more information about how this will be done in practice.

"We also think it essential to set out what a taxpayer or claimant can do if they think the HMRC officer is trying to gather information outside the scope of his powers for the particular purpose in hand.

The draft Advice Note was issued in December 2004:

HMRC powers and your rights

Tax Faculty's response:

Tax Faculty's submission relating to draft Advice Note