Tax Preparation Specialist Welcomes Announcement of New Measures Following Public Consultation
Following public unease at the growing reach of HMRC’s powers, a move to subject them to greater public scrutiny has been welcomed. Measures include the establishment of a committee to oversee professional standards as well as increased transparency in how HMRC uses its statutory powers. Tax preparation specialist and Managing Director of DSR Tax Refunds Ltd, David Redfern, welcomes the measures as a means to build strong safeguards against a potential misuse of HMRC’s powers as well as strengthening public trust in its compliance activities.
The changes have been introduced as a response to a damning report from the House of Lords Economic Affairs Committee report in December 2018, which found that HMRC was treating taxpayers unfairly. Among its key findings were: the balance of HMRC powers had tipped too far in favour of HMRC, that higher penalties aimed to deter appeals were a “tax on justice”, and that HMRC powers disproportionately affected unrepresented taxpayers and those with lower incomes. In addition, there was criticism for HMRC’s approach to tackling the disguised remuneration loan charge as well as its expansion of offshore time limits. Redfern stated “It is right and correct that HMRC is able to use appropriate powers to ensure that all taxpayers are compliant with the taxation regulations of the UK and that taxpayers contribute fairly to our fiscal system, however there has been much concern that HMRC’s powers have tipped disproportionately in their favour so these measures to redistribute that power more equitably are welcome”.
The new measures, announced by the Financial Secretary to the Treasury on Monday, include the establishment of a new Professional Standards Committee to advise on HMRC’s use of its statutory powers and will involve a panel of independent experts. The committee will look into HMRC’s use of new technology in addition to how it implements its statutory powers, although it will not look at the government’s tax policies nor investigate individual cases. In addition to the committee, it will establish a post-implementation review of all changes to HMRC powers and any associated safeguards implemented since 2012, although this will not be a full review of HMRC powers. Redfern commented “These measures are an important step towards strengthening public trust in HMRC and the way it uses its statutory powers, which has taken a hit in recent years due to the perception that HMRC has been using its powers in a heavy-handed and disproportionate way, at odds with the public’s civil liberties. Measures to build strong safeguards against the misuse of power are vital”.
Other measures include more transparency in the way that HMRC exercises its powers, in particular with respect to its debt management, registrations and repayment services, with this information to be published for public appraisal. Additional support for taxpayers, especially vulnerable taxpayers and those under compliance investigations will be provided, including setting up a secure digital channel for complaints, and a review of taxpayers’ experiences during compliance activities are also to be put into operation. Redfern stated “That HMRC needs to be able to use its powers to ensure full tax compliance is not in question – that is the role we expect HMRC to play in order to ensure that the tax burden is shared fairly among all – however, taxpayers deserve to be treated in a professional manner with respect and dignity and these measures are a step in the right direction. There have long been complaints that HMRC uses its powers in an aggressive and disproportionate fashion and as such, these measures are a welcome opportunity to redress those complaints”.
An update on these measures and how HMRC is implementing them will be provided to the House of Lords Economic Affairs committee later this year.
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About DSR Tax Refunds Ltd
DSR Tax Refunds Ltd (company registration 12541357) are a firm of tax rebate specialists serving clients nationwide. DSR Tax Refunds are tax preparation experts who specialise in identifying potential allowable expenses for tax rebates for clients. Their specialist team can help employed and self-employed subcontractors with all relevant paperwork to ensure their claim is handled in an accurate and efficient manner.
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