HMRC's creating innovative change through new legislative pilots consultation proposed a new way of testing changes to legislation – potentially setting up new rules for a discrete group of taxpayers for a set period of time. While generally supportive of new ways to develop tax policy and legislation, the CIOT urges caution with trials which in effect run two parallel tax or penalty systems in tandem. Other concerns include:
no disadvantage should arise for anyone participating in a pilot. Any adverse tax, interest or penalty position should 'promptly be corrected by HMRC';
participants and their advisers should be compensated for costs incurred as a result of their engagement; and
where the outcome of a pilot leads to legislative change, consultation on the proposals should be undertaken as usual: 'A sandbox should not be a short cut to enacting or introducing new rules without any external scrutiny, nor should it remove the need for proper piloting where there is a large scale system change, such as Making Tax Digital', says the CIOT.
The CIOT has also responded separately to HMRC's consultation: The tax administration framework review – information and data, emphasising the importance of accuracy of data used by HMRC and safeguards for taxpayers where inaccuracies need to be corrected.
HMRC's creating innovative change through new legislative pilots consultation proposed a new way of testing changes to legislation – potentially setting up new rules for a discrete group of taxpayers for a set period of time. While generally supportive of new ways to develop tax policy and legislation, the CIOT urges caution with trials which in effect run two parallel tax or penalty systems in tandem. Other concerns include:
no disadvantage should arise for anyone participating in a pilot. Any adverse tax, interest or penalty position should 'promptly be corrected by HMRC';
participants and their advisers should be compensated for costs incurred as a result of their engagement; and
where the outcome of a pilot leads to legislative change, consultation on the proposals should be undertaken as usual: 'A sandbox should not be a short cut to enacting or introducing new rules without any external scrutiny, nor should it remove the need for proper piloting where there is a large scale system change, such as Making Tax Digital', says the CIOT.
The CIOT has also responded separately to HMRC's consultation: The tax administration framework review – information and data, emphasising the importance of accuracy of data used by HMRC and safeguards for taxpayers where inaccuracies need to be corrected.
