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Law Society warns over anti-avoidance measures
The rule of law in taxation is being put at risk in the interests of making the executive more effective, according to the Law Society.
The organisation has criticised the use of retrospective taxation for being a clear example of a breach of the rule of law, the deliberate uncertainty created by the general anti-avoidance rule; and new regulations that exclude or limit access to the courts.
Government measures to counter tax avoidance are to be encouraged but should not erode the rule of law, the society advises in a position paper that proposes:
- a change to the protocol on unscheduled announcements of changes in tax law, to set out the ‘wholly exceptional’ circumstances in which legislation that takes effect before the date of announcement might be regarded as acceptable;
- greater force given to the protocol on unscheduled announcements of changes in tax law;
- a new tax law charter to sets out the rule of law principles to which all tax legislation should adhere and includes the right of access to the courts for a taxpayer;
- the government and HMRC be required to publish the reasoning as to how the relevant minister has certified that the Finance Bill or any other fiscal measure is compatible with the European Convention on Human Rights;
- safeguards for plans to allow HMRC to recover tax debts directly from bank accounts and to introduce a strict liability criminal offence for failing to declare offshore income;
- a more formal or statutory footing for the five-stage consultation approach to tax policy-making;
- an independent panel of advisers to advise the Treasury Select Committee on proposed tax legislation.
