In February, the CIOT invited its members to submit evidence of their experiences of how HMRC has implemented the eight specific post-2012 powers identified for detailed consideration by the HMRC powers and customer safeguards implementation evaluation forum. The forum was set up in July 2019 in response to the House of Lords economic affairs committee’s December 2018 report on Treating taxpayers fairly.
Although the CIOT received fewer than 20 responses, most of these concerned the requirement to correct past offshore tax non-compliance (RTC). Concerns included:
publicity about the RTC failing to reach many taxpayers in time to come forward before the deadline of 30 September 2018;
the disproportionate level of the failure to correct (FTC) penalty, particularly as the cases seen have involved failures through ignorance of the correct tax treatment, rather than deliberate evasion;
HMRC’s ‘arbitrary and unfair’ decision to apply a minimum of 150% FTC penalty in ‘prompted’ disclosure cases;
HMRC’s ‘inflexible and inconsistent’ approach to reasonable excuse arguments put forward by taxpayers; and
the risk that punitive FTC penalties will discourage people from coming forward to disclose in the future.
Other responses concerned accelerated payment notices and follower notices.
The CIOT said the low level of responses was expected, as most of the powers in scope operate in relatively specialist areas of the tax code (such as offshore tax non-compliance and the GAAR), while others are still very new (such as the corporate criminal offence). The deadline for responses was also very short.
The CIOT believes a further review will be required in a few years’ time in order to reach any firm conclusions on implementation of these powers. The evaluation forum will publish its report at the end of May 2020.
In February, the CIOT invited its members to submit evidence of their experiences of how HMRC has implemented the eight specific post-2012 powers identified for detailed consideration by the HMRC powers and customer safeguards implementation evaluation forum. The forum was set up in July 2019 in response to the House of Lords economic affairs committee’s December 2018 report on Treating taxpayers fairly.
Although the CIOT received fewer than 20 responses, most of these concerned the requirement to correct past offshore tax non-compliance (RTC). Concerns included:
publicity about the RTC failing to reach many taxpayers in time to come forward before the deadline of 30 September 2018;
the disproportionate level of the failure to correct (FTC) penalty, particularly as the cases seen have involved failures through ignorance of the correct tax treatment, rather than deliberate evasion;
HMRC’s ‘arbitrary and unfair’ decision to apply a minimum of 150% FTC penalty in ‘prompted’ disclosure cases;
HMRC’s ‘inflexible and inconsistent’ approach to reasonable excuse arguments put forward by taxpayers; and
the risk that punitive FTC penalties will discourage people from coming forward to disclose in the future.
Other responses concerned accelerated payment notices and follower notices.
The CIOT said the low level of responses was expected, as most of the powers in scope operate in relatively specialist areas of the tax code (such as offshore tax non-compliance and the GAAR), while others are still very new (such as the corporate criminal offence). The deadline for responses was also very short.
The CIOT believes a further review will be required in a few years’ time in order to reach any firm conclusions on implementation of these powers. The evaluation forum will publish its report at the end of May 2020.
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