HMRC has outsourced work via self-assessment but ‘this is a step too far’
PKF has called on the government to reconsider its proposal that taxpayers filing a self assessment return will be responsible for considering the application of the general anti-abuse rule. Tax experts were quick to express surprise at the proposal in July.
The ICAEW Tax Faculty said in its submission, published today, that it doubted whether many taxpayers would self-assess that the GAAR applied. The draft legislation indicated that a taxpayer who did so would then have to self-assess a ‘just and reasonable’ adjustment to his tax bill.
‘This onus on the taxpayer to self-assess an adjustment is difficult to reconcile with the [provision that] in any proceedings before a court or tribunal the onus is on HMRC to show that any arrangements are abusive and that any counteraction proposed by HMRC is “just and reasonable”,’ it said.
Lisa Macpherson, National Director of Tax at PKF, said yesterday: ‘In recent years HMRC has managed to outsource much of its work to taxpayers and their advisers through the self-assessment programme but this is a step too far. Apart from placing an unacceptable burden on people who are not experts in tax law, it is likely to be ignored or overlooked by business and individuals completing their returns.
‘On the one hand, serial tax avoiders who are prepared to push the boundaries are unlikely to voluntarily admit that the GAAR applies to them – they will take a chance and leave it to HMRC to challenge them. On the other hand, it’s likely that many self-assessment taxpayers will not properly understand the details of the GAAR. So, as things stand, innocent companies and individuals that get it wrong could find themselves facing penalties for being careless when completing their tax returns.’
The CIOT said that while it would be possible to fit the GAAR into self-assessment once ‘a body of experience’ was available to taxpayers and advisers, there were practical problems surrounding how the taxpayer would reach the decision and how he would defend himself against any contention that he was wrong not to consider the GAAR.
HMRC has outsourced work via self-assessment but ‘this is a step too far’
PKF has called on the government to reconsider its proposal that taxpayers filing a self assessment return will be responsible for considering the application of the general anti-abuse rule. Tax experts were quick to express surprise at the proposal in July.
The ICAEW Tax Faculty said in its submission, published today, that it doubted whether many taxpayers would self-assess that the GAAR applied. The draft legislation indicated that a taxpayer who did so would then have to self-assess a ‘just and reasonable’ adjustment to his tax bill.
‘This onus on the taxpayer to self-assess an adjustment is difficult to reconcile with the [provision that] in any proceedings before a court or tribunal the onus is on HMRC to show that any arrangements are abusive and that any counteraction proposed by HMRC is “just and reasonable”,’ it said.
Lisa Macpherson, National Director of Tax at PKF, said yesterday: ‘In recent years HMRC has managed to outsource much of its work to taxpayers and their advisers through the self-assessment programme but this is a step too far. Apart from placing an unacceptable burden on people who are not experts in tax law, it is likely to be ignored or overlooked by business and individuals completing their returns.
‘On the one hand, serial tax avoiders who are prepared to push the boundaries are unlikely to voluntarily admit that the GAAR applies to them – they will take a chance and leave it to HMRC to challenge them. On the other hand, it’s likely that many self-assessment taxpayers will not properly understand the details of the GAAR. So, as things stand, innocent companies and individuals that get it wrong could find themselves facing penalties for being careless when completing their tax returns.’
The CIOT said that while it would be possible to fit the GAAR into self-assessment once ‘a body of experience’ was available to taxpayers and advisers, there were practical problems surrounding how the taxpayer would reach the decision and how he would defend himself against any contention that he was wrong not to consider the GAAR.
