Proposed amendments to VAT online filing will not cure human rights breach

Responding to HMRC’s consultation on assistance with online filing of VAT returns, the Low Incomes Tax Reform Group (LITRG) has urged HMRC to continue to allow paper filing in appropriate cases, otherwise the breach of human rights identified by the First-tier Tribunal in LH Bishop Electrical Co Ltd and others v HMRC Commissioners [2013] UKFTT 522 (TC) will not be cured.

In that case, the Tribunal found that the VAT regulations breached the human rights of three of the appellants by not providing exemptions from the obligation to file online for those who were prevented from doing so by disability, age, or living in remote areas where broadband was unreliable or non-existent. HMRC argued that if there was any breach, it was cured by the telephone filing service they had put in place for those who were unable to file online; however, the judge found that service was not only inconvenient for the appellants, but also unlawful in that it was not permitted by the regulations and in any event it was kept secret so that none of those who might benefit from it could easily have found out about it in the first place.

Anthony Thomas, Chairman of LITRG, said:

“The judge found that the human rights of the three taxpayers who appealed to the Tribunal were breached by mandatory online filing. HMRC did not appeal against the decision, so they must be taken to have accepted it. HMRC seem to think that if they improve the telephone service and publicise it more widely, that will be sufficient to cure the breach; but quite frankly it will not. They cannot simply rewrite the judgment to suit their own agenda, or wish for a different outcome.

“Major improvements are needed to the telephone filing service before it becomes an acceptable alternative to online filing. Even then, some people – for instance those with hearing or speech impairments, learning difficulties, or whose first language is not English – will be unable to file either online or by telephone. For them, and for many others for whom telephone filing is particularly inconvenient, paper filing really must be retained.

“Failing to cure the breach will result in more litigation, incurring more costs for the Exchequer, huge wastage of time and potential damage to the reputation of HMRC. We remain willing to work with HMRC to help them develop a solution that respects the human rights of all taxpayers.”

 

Notes to editors:

 

1.       The Tribunal decision can be found here.

2.       HMRC’s consultation can be found here, and LITRG’s response here.

3.       The Low Incomes Tax Reform Group (LITRG)

LITRG is an initiative of the Chartered Institute of Taxation to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.

4.       The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Matthew Oliver
External Relations Officer (Monday, Tuesday and Friday)

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