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The proposed new taxpayers' charter has been criticised by a leading commercial law firm for a ‘highly aggressive’ turn of phrase.
The recently published draft document attempts to set out the rights and responsibilities of HMRC and taxpayers in a clear and balanced way.
It includes a pledge by the Revenue that it will ‘pursue relentlessly’ people who ‘bend’ the rules – and legal services provider McGrigors has claimed that this clause is ‘far too strongly worded’.
The company said that the taxman would be given authority to ‘adopt a highly aggressive stance towards taxpayers who are engaged in entirely legitimate tax planning’.
The company went on to say that what constitutes ‘bending’ of rules can often be unclear in practice, and the term could cover ‘harmless’ tax planning as well as obviously cynical tax avoidance.
McGrigors also said it is unclear how HMRC would ‘relentlessly pursue’ taxpayer, adding that the Revenue has ‘legal duties from public law not to behave unreasonably’.
Partner Rupert Shiers commented: ‘By definition, a charter is supposed to clearly define rights and responsibilities, but this point is highly ambiguous.
‘If Parliament approves this charter, we could see far more extensive challenges launched against innocent taxpayers.
‘Everyone wants HMRC to have the power to deal with the minority of taxpayers who break the rules – but there are many more who arrange their affairs to minimise the amount of tax they have to pay, and do so legitimately.
‘The Government must not use the taxpayer's charter to make it practically impossible for those [people] to defend their position.’
HMRC responded to McGrigors’ criticism by insisting that ‘the draft charter makes it very clear that [we] will regard everyone as honest unless we have reason to believe otherwise. We will pursue those who break or abuse the rules.
The department went on: ‘The charter recognises that people make “honest mistakes” but also makes clear [that] HMRC will tackle cheats’.
Responses to the consultation document on the proposed charter can be made online, by email, or by fax on 020 7147 0391.
Contributions can also be posted: HMRC, Room 3E/02, 100 Parliament Street, London SW1A 2BQ.
The submission deadline is 12 May 2009.
Views on the latest consultation can also be aired on the Taxpayers Charter site, a free source of news, analysis and comment.
