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The new draft of the proposed HMRC Charter is 'less than tax professionals hoped, but much better than we feared', according to tax disputes expert Rupert Shiers.
Earlier this year, Mr Shiers criticised the first version of the document, calling it ‘highly aggressive’ and ‘ambiguous’. He was particularly concerned by the threat to ‘pursue relentlessly’ individuals who do not strictly obey tax law.
That phrase has been removed from the latest draft, after the Revenue accepted that taxpayers ‘might find this language intimidating’. The department’s reworded pledge is to ‘tackle people who deliberately break the rules and challenge those who bend the rules’.
A lot of concerns have been addressed in the suggested charter’s second version, said Mr Shiers, who is a partner with the law firm McGrigors.
‘It is still not the charter that a lot of people in the tax industry has in mind when it was first mooted,’ he added, ‘but it does now do something useful and focuses more closely on what taxpayers can expect from the Revenue.’
The document is divided into two main categories, covering taxpayers’ rights and their obligations.
The former section features nine promises from HMRC to…
- Respect you
- Help and support you to get things right
- Treat you as honest
- Treat you even-handedly
- Be professional and act with integrity
- Tackle people… (see above)
- Protect your information and respect your privacy
- Accept that someone else can represent you
- Do all we can to keep the cost the dealing with us as low as possible.
The details of four are the most interesting of the document, Mr Shiers remarked.
‘The Revenue has long been in danger of being hamstrung by coming to an arrangement with one person and then having all other taxpayers expect exactly the same treatment,’ he said.
‘Now, the promise is to behave even-handedly; to act within the law and explain a person’s legal right and how to complain about decisions, rather than simply promising everyone the same deals.’
The section in the newly published proposed charter covering obligations is shorter. Each individual is expected by the Revenue to…
- Be honest
- Respect our staff
- Take care to get things right.
‘This is very much better: there has been a big change between drafts one and two, and I believe that this latest version will be very much like the final one,’ said Mr Shiers, who serves as a member of the Chartered Institute of Taxation’s management of taxes sub-committee.
The CIOT also welcomed the new version of the charter. It is ‘very much in line with [our] recommendations and represents a huge improvement over the version published for comment in February,’ said tax policy director John Whiting.
He added: ‘This is a workable and useful document that has the potential to help all those who have to deal with the tax system.
'There may be some points we would still like to change – for example, we prefer Taxpayers’ Charter as the title – but we accept that there have to be some compromises to make it fit all the many situations HMRC deal with.’
Baker Tilly head of tax George Bull, however, is not satisfied by HMRC's updated draft charter, which he claims is 'still disappointingly short on detail and fails to offer the taxpayer any real protection'.
'It is effectively a lengthier restatement of the generalities contained in the previous draft,' he said. 'The lack of focus shows itself in two ways in particular, which highlight the inequality of the relationship between HMRC and their "customers".
'As far as [the Revenue's] behaviour is concerned, the charter only sets out in general terms what the taxpayer can expect, and it does nothing to provide any form of enforceable sanction on HMRC or compensation to the taxpayer for failure to meet defined standards of administration.'
Mr Bull added that the proposed document 'does not give taxpayers any real guidance as to what is required of them, and this is potentially more dangerous'.
'The taxpayer is subject to statutory requirements that are reinforced by potentially drastic penalties, which the document fails to refer to, whereas the tax authorities are under no binding obligation to the taxpayer. The charter does the disservice of representing the playing field as level when it is not.'
Read the charter in full here. Share your views at the Taxpayers Charter site, a free source of news, analysis and comment.
