The House of Lords Economic Affairs Finance Bill Sub-Committee want to hear from a 'wide range of people' in inviting written contributions for its inquiry on the draft Finance Bill 2018 and examining developments in the balance of powers and safeguards between HMRC and the taxpayer and progress on the ‘Making Tax Digital’ programme.
The last detailed review of HMRC's powers and safeguards was over a decade ago and culminated with the introduction of a new tax penalty regime across the taxes introduced by Finance Acts 2007-2009 and then subsequently modified by later acts. The proposed measures in Finance Bill 2019 increase penalties for offshore offences and the requirement for tax security deposits in high risk CIS and company tax cases.
Making VAT Digital is due to be introduced from April 2019: this imposes a requirement to use functional compatible software for most VAT registered business, see MVD: who has to join?
The deadline for submissions is 1 October.
Sub-Committee's Areas of interest
HMRC powers
- What principles should underlie the design of HMRC powers, and where should the balance be struck between taxpayer and tax authority?
- What principles should govern the development of HMRC powers in a globalised digital information age?
- To what extent, or in what areas, is the existing balance of powers between HMRC and the taxpayer inappropriate or unfair?
- How should HMRC powers be differentiated to reflect the different problems being tackled e.g. careless error, sophisticated tax avoidance, and deliberate tax evasion?
- How are HMRC’s powers operating in practice? Are they being used in line with their original policy intent?
- Is there sufficient oversight of HMRC powers, and safeguards against their abuse or misuse? Does the oversight and governance of the powers need to be improved? If so, how?
- What is the right balance of powers and safeguards in the security deposit regime and the assessment of offshore matters, for which amendments are proposed in clauses 33–35 of the draft Finance Bill? [ 33 Time limits for assessments involving offshore matters: IT and CGT, 34 Time limits for proceedings involving offshore matters: IHT, 35 Security deposits: construction industry scheme and corporation tax
Making Tax Digital for VAT
- What key improvements have occurred, or new concerns have arisen, since the Sub-Committee’s report on Making Tax Digital for Business was published in March 2017?
- How prepared are HMRC, businesses (small and large) and software providers for the implementation of Making Tax Digital for VAT in April 2019, and what are the challenges of concurrent preparations for Brexit?
- What are the potential costs of Making Tax Digital for VAT for businesses?
We are looking to hear from as diverse a range of views as possible—if you think someone you know would have an interest in contributing to the inquiry, please draw this call for evidence to their attention.
Chairman's comments
Lord Forsyth of Drumlean, Chairman of the Sub-Committee, comments:
“HMRC’s powers to tackle tax avoidance and tax evasion have expanded exponentially in recent years. The Sub-Committee will investigate the practical impact of these new powers on the taxpayer.
“We will also consider whether Making Tax Digital for VAT is on track for introduction in April 2019, and whether sufficient support for businesses will be in place in time.
“We want to hear from a wide-range of people and organisations, in particular those who may have experienced the use of HMRC's powers or be preparing for Making Tax Digital, and we are looking for sensible, pragmatic recommendations on how the current approach to these issues could be improved.”
Source: Parliament UK: Call for evidence