CIOT welcomes HMRC rethink on ‘deliberate wrongdoing’ draft law
The Chartered Institute of Taxation (CIOT) has welcomed HM Revenue and Customs’ (HMRC’s) announcement that they will be extending the period for consultation on legislation on ‘deliberate wrongdoing’ by tax advisers to enable them to look again at it.
The draft legislation has been criticised for appearing to apply not just to illegal actions but to any advice that could lead to a tax loss to the Treasury – such as suggesting someone take out an ISA. It has been written to apply to anyone offering such advice, so would theoretically mean a newspaper writing a ‘Top 10 tax tips’ feature or someone offering tax advice as a friend or a welfare adviser would be likely to be breaking the law.
The CIOT was informed of the extension by HMRC this morning. Consultation on the draft legislation will now run until 28 April, putting the introduction of any resulting legislation beyond any Finance Bill resulting from next month’s Budget and into the next Parliament.
CIOT President Andrew Hubbard said:
“We are pleased to note that HMRC have moved quickly to respond to the concerns which we raised about the draft legislation.
“We particularly welcome the fact that any applications to the Tribunal for access to working papers of agents who are accused of deliberate wrongdoing must be made at a hearing which the agent has the right to attend. The interest of justice would not have been served had the proposal to deny agents the right to be represented been implemented.
“We also welcome the fact that the consultation period is to be extended. We fully support HMRC having a power to deal effectively with the very small number of agents who are involved in what amounts to fraud in relation to a client’s tax liabilities, but the legislation as drafted went far wider than this. In our opinion, it would have been unworkable and would have created a very damaging rift between HMRC and tax advisers. We believe that the extension to the time limit will allow time for mature reflection and result in legislation which is properly targeted, effective and proportionate.”
Notes to Editors
1) The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.
The CIOT’s 14,900 members have the practising title of ‘Chartered Tax Adviser’.
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George Crozier
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The Chartered Institute of Taxation
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