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If I were Chancellor...

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4th Feb 2015
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HM Treasury has invited people to present ideas about what should be included in the 2015 Budget Statement, due to be presented on 18 March 2015. Rebecca Cave presents her fantasies about what she would introduce if she had control.

I would firstly introduce a “Fairness in Tax Administration” law or FITA.

Politicians and HMRC often bleat about fairness in relation to tax.  There is even a confidential online form, phone number and address for telling the Revenue if someone is not paying their fair share of tax.

I believe fairness in tax should start with tax administration. The rules that keep the tax system running smoothly should apply in equal measure to taxpayers and to HMRC. For instance under my fantasy FITA law:

  • Where the taxpayer is required to pay tax within 90 days – such as on receipt of an accelerated payment notice (APN), HMRC should be required to repay tax to the taxpayer within 90 days of the date the tax tribunal ruled in favour of the taxpayer
  • Where the taxpayer has to pay interest on late paid tax at 3%, HMRC should also pay interest at 3% on repayment of tax for a period that starts with the day the tax was overpaid 
  • Where HMRC has the power to refer a specific part of a tax enquiry to Tribunal for settlement, the taxpayer should also have the same power 

When it comes to providing information to HMRC, 'Digital by Default' is the new mantra. But I think this should work both ways. Under my FITA law the following would apply:

  • Where a business has made a tax return online, any questions HMRC want to raise about that return must be submitted to the taxpayer electronically
  • As the taxpayer can suffer a penalty for failing for submit tax returns online, HMRC should suffer the same penalty for failing to communicate online
  • Where HMRC sets a deadline for the taxpayer to reply, normally 30 days, HMRC should also respond to questions any taxpayer asks within the same period

Where the taxpayer makes a mistake in their tax return, or provides incomplete or inaccurate information to HMRC, they can expect a penalty to be levied.

Under my FITA law a flat rate penalty would be imposed on HMRC for every tax-related mistake found in the information on the GOV.UK website, and every error introduced to an employer’s PAYE data by the RTI system. 

No doubt you also have ideas about how the playing-field could be leveled between HMRC and the taxpayer.

If you are interested in making a serious Budget representation your suggestions need to reach the Treasury by 13 February 2015, either by email or by completing an online survey.

Rebecca Cave is the joint author of Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2014/15 published by Bloomsbury Professional.

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By TaxAngel
04th Feb 2015 21:09

I would change the law so that.....

.. .HMRC was required to answer mail in the same time-scales they give us - why does it take them so long?;

....when we are told someone will call us back, they call back promptly and if we're not here leave a number on which we can call them (and not a generic number for someone who has no idea about the problem);

....when HMRC implements new software, taxpayers are compensated for the time, effort and cost needed to put things right that have been messed up by the 'thoroughly tested' new systems which are often not fit for purpose

....HMRC announces new working practices, it has told its front line staff first and the procedures are in place, rather than the front line staff learn about new procedures from us calling in

.....HMRC is required to design all its procedures with agents' needs in mind, as Your Charter envisages, rather than as a poor add-on years later

I wish....

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