CIOT welcomes the removal of ‘HMRC thinks’ from finance bill

The Chartered Institute of Taxation (CIOT) welcomes the removal of the wording ‘HMRC thinks’ from the Finance Bill 2007. The wording was to be used in relation to penalties.

Rob Ellerby, CIOT President, says: “The CIOT objected to the use of this wording as it was subjective and not objective. We welcome the fact that HM Revenue & Customs (HMRC) listened to us and have responded appropriately.”

The CIOT put the case in the following way when the draft legislation was published: “Where penalties are concerned, the test should always be objective rather than subjective. We believe that in the proposed legislation the words ‘HMRC think that’ are superfluous. The words come from legislation where the inspector is exercising judgement. In the case of penalties, that is not the position. Either there has been an offence giving rise to a penalty or there has not. The penalty follows from what the taxpayer did and from nothing else. These words are not needed.”

Rob Ellerby adds: “The removal of the phrase ‘HMRC thinks’ will make the legislation work better, one of the main aims of the CIOT.”

Notes to Editors

The Chartered Institute of Taxation (CIOT) is a registered charity (number 1037771) and is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT deals with all aspects of direct and indirect taxation. Its primary purpose is to promote education in and the study of the administration and practice of taxation. One of its key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities. The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its aims: it is entirely apolitical in its work. The 14,000 members of the CIOT have the practising title of ‘Chartered Tax Adviser’.

The Institute was established in 1930 and received its Royal Charter in 1994. It is a United Kingdom member of the Confédération Fiscale Européenne (CFE), the umbrella body for 150,000 tax advisers in Europe. As part of its charitable activities, the CIOT also sponsors the Low Incomes Tax Reform Group that works to improve and simplify the tax system so as to make it more responsive to the needs of those who cannot afford to pay for tax advice. The Institute offers the Advanced Diploma in International Taxation as a specialist qualification for international tax practitioners primarily working in corporate tax.