Lords challenge the chancellor on offshore tax time limits

Clauses 79 and 80 in the Finance (No 3) Bill that extend the time limits for assessing offshore tax matters to 12 years are unnecessary and should be removed from the Bill say the Lords.

In a letter to the chancellor Philip Hammond the House of Lords’ economic affairs Finance Bill sub-committee presents evidence that the government’s justification for increasing the time limit is inadequate. Witnesses told peers the measure would be burdensome for older and low-income taxpayers and suggested it may have been motivated by resource pressures at HMRC.

The time limit is currently four years unless a taxpayer has failed to take reasonable care or has been deliberately non-compliant.

Lord Forsyth of Drumlean who chairs the sub-committee said: ‘Witness after witness giving evidence to our inquiry opposed the extension of offshore tax time limit to 12 years. This would place disproportionate burdens...