The CIOT has responded to HMRC’s consultation on modernising tax debt collection from non-paying businesses. Key comments include:
Early consultation is welcome. The UK government appears to be gathering evidence on changes in business practices with a view to ‘future proofing’ its debt recovery powers. The CIOT therefore expects to see further consultation, based on the evidence gathered, before any specific measures are announced.
Based on the consultation documentation, there seems to be little evidence of abuse, and the answer may be for HMRC to use its existing powers more fully rather than extend those powers.
Any extension to HMRC’s powers must be subject to appropriate safeguards and oversight.
In order to establish the level of tax debt that is outstanding and from which businesses, HMRC should improve its IT systems, so they are updated across the board as soon as the taxpayer has made a tax payment or agreed a time to pay arrangement.
The new VAT penalty regime that is being introduced from 1 January 2023, and extended to income tax in 2024 and 2025, may help address the non-payment of taxes. The CIOT recommends that the impact of the new VAT penalty regime is appraised before making any further changes to HMRC’s debt recovery powers.
The CIOT has responded to HMRC’s consultation on modernising tax debt collection from non-paying businesses. Key comments include:
Early consultation is welcome. The UK government appears to be gathering evidence on changes in business practices with a view to ‘future proofing’ its debt recovery powers. The CIOT therefore expects to see further consultation, based on the evidence gathered, before any specific measures are announced.
Based on the consultation documentation, there seems to be little evidence of abuse, and the answer may be for HMRC to use its existing powers more fully rather than extend those powers.
Any extension to HMRC’s powers must be subject to appropriate safeguards and oversight.
In order to establish the level of tax debt that is outstanding and from which businesses, HMRC should improve its IT systems, so they are updated across the board as soon as the taxpayer has made a tax payment or agreed a time to pay arrangement.
The new VAT penalty regime that is being introduced from 1 January 2023, and extended to income tax in 2024 and 2025, may help address the non-payment of taxes. The CIOT recommends that the impact of the new VAT penalty regime is appraised before making any further changes to HMRC’s debt recovery powers.
