Permanent Secretary, Dave Hartnett has confirmed HMRC's intention to roll out further tax disclosure facilities in the future in order to target "sensibly defined groups", as identified by its risk analysis.
Dave and some of his colleagues were guests at a round table event hosted by the Chartered Institute of Taxation (CIOT) last night. The objective of the discussion, introduced by CIOT President Andrew Hubbard was to consider HMRC's policy of promoting selected tax disclosure facilities and "throw the issues around".
Also invited to attend were representatives from the British Medical Association (BMA) and British Dental Association and by co-incidence
The medics, it transpires, were not amused by the fact that they have been singled out by HMRC. Derek Machin, Chairman of the BMA Private Practice Committee revealed that the BMA had only been given four days notice of the Tax Health Plan, and he was unaware that it had included dentists until last night’s event. He complained that HMRC had told them that it was “really urgent” but then the BMA then heard nothing from HMRC: "They all disappeared for some reason in November/December, and we had to chase them up." [Ed: Ah, they were busy with the Pre-Budget Report, no doubt.]
Derek also said that it would have been better if HMRC had forewarned the BMA of the type of problems it had identified and then the BMA would have been able to assist members better. These matters prove very sensitive for representative organisations, and it is easy for the BMA to find itself condemned for not acting within its members interests.
There seems to have been a great deal of confusion, and the general ill-will amongst the medics appears to have been exacerbated by the prospect of a 50% tax rate in 2010/11.
Mike Wells (HMRC Risk) assured the room that medics were not being singled out, but HMRC “had to start somewhere”.
The discussion moved on and it became apparent from the nodding in agreement that many of those around the table (who were not members of HMRC) seemed to favour more education for taxpayers and a general tax disclosure facility.
The trouble is that the tax profession is not running HMRC and then there is the added problem of resources! HMRC does not have the manpower to cope with a general disclosure facility. Dave Hartnett clearly favours the piecemeal approach, preferring to target disclosure opportunities at set populations of taxpayers, backed up by HMRC saying “we have specialist knowledge; this is what makes people worried”.
So, more disclosure facilities will be on their way in time, it is very likely that those in the “home improvements” sector will be next on the list. A tricky group for HMRC to rootle out with in all probability a larger than average population of unrepresented taxpayers, most who possibly complete three line tax returns and don’t listen to the radio (HMRC ran a series of campaigns on commercial radio in 2007/08).
Nichola Ross Martin adds: “One thing not contemplated in this discussion, which I only thought about on the train home was whether HMRC may be better off working more closely with members of the tax profession in actually delivering and running these disclosure facilities on its behalf in the future. HMRC is surely better off in receiving a disclosure which has been checked over by a tax agent first.”