Alignment of powers across all taxes would reduce complexity in the tax system, avoiding concurrent compliance checks into different taxes based on different rules. Future consultation on HMRC’s enquiry powers and whether those powers should be extended or replaced should be prioritised. The CIOT notes that the focus of the alignment of powers should be simplification, rather than revenue-raising or enhancing HMRC’s powers at the expense of taxpayer safeguards. The CIOT’s response to question 2 considers various related matters in some detail.
The CIOT also in principle supports the alignment of penalties across taxes, noting the ‘sheer proliferation’ of penalty regimes that have been introduced for different taxes. The new points-based penalty regime (currently in force for VAT) will likely cause extra complexity as it is extended to MTD for ITSA, running alongside the existing FA 2009 Sch 55 penalty provisions. The CIOT suggests that aligning late-filing and late-payment penalties across all taxes ‘once and for all’ would be preferable. Reponses to question 13 set out some of the difficulties with existing penalties.
Aligning appeals processes would also aid simplification and general understanding, says the CIOT, highlighting some of the difficulties for taxpayers and businesses where different rules apply for different taxes. Allowing adequate time for disputes to be resolved by agreement would save costs for all parties and help reach earlier resolution.
The CIOT sets out a major challenge for HMRC and a future government: a new Management Act – to replace TMA 1970 and all of the tax administration legislation, currently spread over multiple Finance Acts. The CIOT also suggests that ‘once the revised processes are enacted the government needs to resist making further changes to them for several years to give them time to bed in’.
The previous Labour Government had considered a new Management Act, in conjunction with the merger of the former Inland Revenue and Customs & Excise in 2006, but decided not to proceed with those proposals following concerns around the scope of draft clauses published in November 2006.
Alignment of powers across all taxes would reduce complexity in the tax system, avoiding concurrent compliance checks into different taxes based on different rules. Future consultation on HMRC’s enquiry powers and whether those powers should be extended or replaced should be prioritised. The CIOT notes that the focus of the alignment of powers should be simplification, rather than revenue-raising or enhancing HMRC’s powers at the expense of taxpayer safeguards. The CIOT’s response to question 2 considers various related matters in some detail.
The CIOT also in principle supports the alignment of penalties across taxes, noting the ‘sheer proliferation’ of penalty regimes that have been introduced for different taxes. The new points-based penalty regime (currently in force for VAT) will likely cause extra complexity as it is extended to MTD for ITSA, running alongside the existing FA 2009 Sch 55 penalty provisions. The CIOT suggests that aligning late-filing and late-payment penalties across all taxes ‘once and for all’ would be preferable. Reponses to question 13 set out some of the difficulties with existing penalties.
Aligning appeals processes would also aid simplification and general understanding, says the CIOT, highlighting some of the difficulties for taxpayers and businesses where different rules apply for different taxes. Allowing adequate time for disputes to be resolved by agreement would save costs for all parties and help reach earlier resolution.
The CIOT sets out a major challenge for HMRC and a future government: a new Management Act – to replace TMA 1970 and all of the tax administration legislation, currently spread over multiple Finance Acts. The CIOT also suggests that ‘once the revised processes are enacted the government needs to resist making further changes to them for several years to give them time to bed in’.
The previous Labour Government had considered a new Management Act, in conjunction with the merger of the former Inland Revenue and Customs & Excise in 2006, but decided not to proceed with those proposals following concerns around the scope of draft clauses published in November 2006.
