HMRC has published a review of its policy on interest rates, in response to recommendation 8 of the independent review of the loan charge. The review considered the underlying principles for HMRC charging and paying interest, including how interest rates are set and how interest is calculated.
Key recommendations and conclusions include:
HMRC will update taxpayers at least annually on the status of open tax enquiries (following Sir Amyas Morse’s recommendation) and will contact avoidance scheme users ‘at an early stage’, before a return has been received, rather than waiting until an enquiry can be opened;
where enquiries remain open for a significant period, and/or interest rates are particularly high, the government should consider introducing a mechanism to assess whether the automatic link with the Bank of England base rate should be maintained or suspended, and should consider giving HMRC ‘greater discretion over the application of interest in exceptional circumstances’.
HMRC has published a review of its policy on interest rates, in response to recommendation 8 of the independent review of the loan charge. The review considered the underlying principles for HMRC charging and paying interest, including how interest rates are set and how interest is calculated.
Key recommendations and conclusions include:
HMRC will update taxpayers at least annually on the status of open tax enquiries (following Sir Amyas Morse’s recommendation) and will contact avoidance scheme users ‘at an early stage’, before a return has been received, rather than waiting until an enquiry can be opened;
where enquiries remain open for a significant period, and/or interest rates are particularly high, the government should consider introducing a mechanism to assess whether the automatic link with the Bank of England base rate should be maintained or suspended, and should consider giving HMRC ‘greater discretion over the application of interest in exceptional circumstances’.
