A comprehensive review of HMRC’s new powers reveals few horror stories, however, over a third of advisers thought that new powers had been used unreasonably.

The Chartered Institute of Taxation (CIOT) has just published a review and member survey covering the first year of operation of HM Revenue & Customs’ (HMRC) new Powers regime. In it the CIOT sets out a series of recommendations to get the new regime operating more effectively. These include more specialist training for HMRC staff and more work between HMRC and professional bodies in a number of areas to improve clarity and understanding of the system and ensure that powers are proportionate, fair and transparent.

The CIOT also conducted a member survey, key results were:

The CIOT’s recommendations

The CIOT intends to revisit the powers implementation annually over the new few years.

CIOT President, Andrew Hubbard says:

“We are still in the early stages of the new HMRC Powers regime. The system is still bedding down, and both taxpayers and HMRC are still getting to grips with the various powers and how they interact.

“The good news is there has been no big rash of horror stories so far.” However, he adds “We have identified concern around how the new penalty regime is being operated. HMRC seem reluctant either to impose high penalties for deliberate understatement or to accept that there have been innocent errors in some cases, instead going in almost every case for the middle option of determining a failure to take reasonable care.”

“It is incumbent on all involved to respond to the points we have raised. The new Powers regime may be in its infancy but if we don’t get the rules of engagement right at the beginning we will store up problems for later.”