The Treasury Committee has expressed concerns about the proposed debt recovery powers and the use of retrospective legislation.
On the proposed debt recovery powers, the committee recommends prior independent oversight before HMRC exercises its proposed power to recover a range of assessed debts directly from bank accounts. The report notes that the proposed policy is highly dependent on HMRC’s ability to determine accurately which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past. The committee chairman said: ‘The government must demonstrate that it has dealt with the committee’s concerns before proceeding.’
On retrospective legislation, the committee observed that the government has not followed its recommendation in its Budget 2012 report to limit the use of restrospective legislation to ‘wholly exceptional circumstances’. The report observes in particular that the Red Book announced an extension of the requirement for taxpayers to pay upfront any disputed tax associated with anti-avoidance schemes. This policy will retrospectively apply to some of the 65,000 outstanding tax avoidance cases. The committee chairman said: ‘Retrospection puts policy on a slippery path to arbitrary taxation, discouraging investment and innovation and creating the scope for great unfairness.’
However, the committee welcomed the proposed pensions and savings reforms, in particular the greater flexibility and choice they offer to consumers. Finally, given that ISAs and pensions are becoming more similar, the committee recommended that the government sets out its intended approach to the taxation of all forms of savings.
The Treasury Committee has expressed concerns about the proposed debt recovery powers and the use of retrospective legislation.
On the proposed debt recovery powers, the committee recommends prior independent oversight before HMRC exercises its proposed power to recover a range of assessed debts directly from bank accounts. The report notes that the proposed policy is highly dependent on HMRC’s ability to determine accurately which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past. The committee chairman said: ‘The government must demonstrate that it has dealt with the committee’s concerns before proceeding.’
On retrospective legislation, the committee observed that the government has not followed its recommendation in its Budget 2012 report to limit the use of restrospective legislation to ‘wholly exceptional circumstances’. The report observes in particular that the Red Book announced an extension of the requirement for taxpayers to pay upfront any disputed tax associated with anti-avoidance schemes. This policy will retrospectively apply to some of the 65,000 outstanding tax avoidance cases. The committee chairman said: ‘Retrospection puts policy on a slippery path to arbitrary taxation, discouraging investment and innovation and creating the scope for great unfairness.’
However, the committee welcomed the proposed pensions and savings reforms, in particular the greater flexibility and choice they offer to consumers. Finally, given that ISAs and pensions are becoming more similar, the committee recommended that the government sets out its intended approach to the taxation of all forms of savings.
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