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HMRC has just published a policy paper ‘Professional standards for HMRC’s compliance work’. Much of it is common sense and perhaps hardly needs saying: the first words are ‘getting things right’. But, that aside, I do welcome the publication of something which does set standards.
One phrase did intrigue me and raised some alarm bells: ‘We will develop every case to a litigation standard.’ There have been too many tribunal decisions where the judge has been critical of the way in which HMRC has prepared its case (and in fairness the boot is often on the other foot). So to that extent I can see where HMRC is coming from. But I have to say that when I first read this my impression was that it was implying – ‘we are going to take you to court on every case’.
Now I know that it does not say that, but impressions matter. I don’t know whether copies of the standard will be given to taxpayers as a matter of routine at the start of an enquiry – I suspect that they might – but I know that if I were facing an HMRC enquiry that comment about litigation would be very alarming and potentially counterproductive.
I wonder whether there is an alternative wording which could be used – something more along the lines of ‘if despite our best efforts we are unable to settle matters with you and you wish to take matters to an independent tribunal we will ensure that our litigation approach is of the highest standard’. That’s not quite right and could be improved on, but I think that it is a step in the right direction.
Perhaps it would be helpful if HMRC could have a rethink.
If you do one thing...
If you deal with international tax read the latest updates to HMRC transfer pricing guidance in its Exchange of Information Manual at IEIM300170
