This week's opinion: 14 November 2019

Readers will know that I share the concerns of many others that the Taxes Management Act 1970 is not fit for purpose and needs a radical overhaul. The announcement by HMRC (tinyurl.com/hmrctn31oct) is further evidence that much of the tax administration is built on shifting sands. HMRC says its current practice of issuing notices to file and similar documents by automatic processes rather than being done by a specified officer of the board is supported by the legislation, but it must be sufficiently worried about the position to announce that legislation will be introduced to put the matter beyond doubt. 

We would all accept that it is impractical for an individual officer to issue each and every notice to file and there can be no objection to regularising the position going forward. But the proposal is that the legislation will have retrospective effect: that is more difficult to accept. One can see why HMRC wants to do this, because if the wheels were to come off the entire system of tax return filing going back many years chaos could ensue. But retrospection in tax is not something anybody wants to see. We have already had retrospective legislation to deal with voluntary returns and, although that was generally to the benefit of taxpayers, the same concerns arise.

Assuming that HMRC’s proposals are enacted after we have a new government and, despite the opposition that has been expressed in many quarters, this seems inevitable, we surely must then move to a wide-ranging review of the whole administrative machinery of the tax system. Continued sticking plaster solutions are simply not acceptable.