.png)
.png)
I welcome the call for evidence on HMRC’s enquiry and assessment powers, penalties and safeguards (tinyurl.com/hmrctaxadmincall). There is widespread agreement that we need to look afresh at some fundamental features of enquiry and assessment powers.
Much has changed since the powers review in the early 2000s, not least the growth of digital technology and, of course, some of the core elements of the TMA go back before any of us started working in tax. The consultation questions seem well judged and it is helpful that international comparisons have been made to show other ways of dealing with some of the key issues.
One part of the document did, however, disturb me. Under procedural challenges is this sentence: ‘Some taxpayers and agents seek to exploit aspects of HMRC’s application of its discovery powers: for instance, when the tax liability is not in doubt but the validity of the discovery assessment process itself, which involves a degree of subjectivity, is challenged.’
That seems to me to be a fundamental misstatement of the position. Taxpayers and their agents are not ‘exploiting’ anything: they are seeking quite properly to test whether HMRC has applied the law correctly. It is not helpful in a document which seeks to balance HMRC powers with taxpayer safeguards to use such language. It might well be that there is a case for saying that the law on discovery needs to be looked at again to ensure that it works effectively for taxpayers and HMRC alike. But that is a very different proposition. Let’s hope that this language is not an indication that HMRC is approaching this process in the wrong spirit.
If you do one thing…
Read para 12 of H & H Contract Scaffolding Ltd (TC9082). It is a very clear rebuttable to the argument that if a taxpayer makes a mistake, they must have been careless.
