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Widespread fears that HMRC were to be granted restrictive new privileges have been allayed.
Increased powers of inspection that were expected to be introduced in this year's Finance Bill have been relaxed to suggest a less forceful approach by the Revenue.
The new entitlements were mooted to provide the department with the authority to enter and search business premises with, potentially, as little as 24 hours notice.
However, following debate in Parliament, they will now be subject to limits and conditions, and the altered bill will introduce at least a seven days' notice period.
The original draft of the bill contained rules that would have allowed inspectors to enter and inspect any business premises. This was amended to only premises used by the person whose liability is being checked (with the exception of locations used in connection with the taxable supply of goods).
In addition, the inspection powers are now limited so that inspectors may not enter or inspect any part of premises used solely as a dwelling.
Grant Thornton welcomed the changes, remarking that businesses will have breathed a collective sigh of relief at hearing the news.
The financial adviser's national tax office head, Francesca Lagerberg, welcomed 'improvements here to safeguard taxpayers' rights that the original draft had neglected'.
She went on to stress that is 'essential that any new power for HMRC has a matching safeguard and is only used in limited and appropriate circumstances. No one wants to see any possibility of “fishing expeditions”' into taxpayers' affairs'.
Extending the notice window to seven days, said Mrs Lagerberg, 'will enable businesses to be better prepared for visits, which can be very stressful. In particular, small-to-medium-sized businesses will benefit greatly, as many lack the resources to comply promptly [with] an HMRC inspection'.
However, Fran then noted that other new rules — unchanged from the original draft of the Finance Bill — will allow for a shorter notice period, or no notice at all, to apply where it is agreed with the occupier, or where it is approved by an authorised officer of HMRC.
She remarked that the finalised powers are still fairly stringent in areas, but added that it was pleasing 'that the Treasury saw sense in the more significant points being made by interested parties when amending HMRC's powers and that there is guidance'.
