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The House of Lords' decision in R v CIR ex p Wilkinson [2006] STC 270 made clear that the scope of HMRC administrative discretion is not as wide as previously thought to make concessions that depart from the strict statutory position.
While most ESCs will be able to continue in their current form, some exceed the scope of the discretion of the Wilkinson judgment. To retain the effect of those concessions, they will be put on a legislative basis where it is appropriate to do so.
Each concession will be considered carefully and, while the aim is to retain as many concessions as possible, some may no longer be required and it may not be possible to legislate for the effect of some others.
These ESCs may, therefore, need to be withdrawn. In such cases, HMRC say they will give taxpayers notice to allow them to review their affairs. There will be no retrospective effect of any change.
In anticipation of the need to legislate the effect of some concessions, FA 2008, s 160 provides an enabling power which allows the tax treatment afforded by existing published concessions to be legislated by Treasury order.
HMRC have published a consultation document which sets out draft legislation for inclusion in such an order, to be laid early in 2009.
The purpose of the consultation is to ensure that the legislation as drafted will successfully maintain the purposes and effects of the existing concession. As the review of the concessions continues, HMRC expect further such consultation on other ESCs that appear to exceed the scope of HMRC's discretion.
See the consultation document for full details of the concessions to be legislated.
Comments on the effectiveness of translating the tax effects of the concessions listed above into legislation should be sent by 26 January 2008 to Toby Pearce, HMRC Central Policy, 100 Parliament Street, London SW1A 2BQ, or email tap@hmrc.gsi.gov.uk.
