ACCA welcomes the opportunity to respond to the HMRC call for evidence on the Tax Administration Framework Review: enquiry and assessment powers, penalties, safeguards
ACCA response summary:
- ACCA believes that trust, transparency, and certainty lie at the heart of a healthy relationship between a tax authority, the taxpayers and the agents who interact with it. A lack of investment in HMRCs staff and digital capabilities has, over time, damaged relationships between HMRC, compliant taxpayers, and the agents supporting them, with service standards at HMRC falling to an unacceptably low standard.
- Moving to a single set of powers across all taxes presents a number of opportunities, including simplification of the broader system, a principle ACCA has long supported. Taxpayers would have a clearer understanding of their rights and obligations, promoting fairness and equity in the tax system.
- HMRC service level improvement and effective communication are priorities for ACCA members. One of the greatest risks associated with not moving towards a single set of powers across all taxes is continuing poor service levels for taxpayers, causing significant challenges across a range of areas.
- While changes to assessment and enquiry powers are likely to lead to additional costs for HMRC, agents, and taxpayers – ACCA believes these costs should be viewed through the lens of potential longer-term benefits. Reduced complexity from a streamlined system would, in turn, translate to cost savings and increased efficiency.
- We believe that where HMRC identifies risks which lead to suspicion of fraud or attacks on the tax system, it is more effective for HMRC to exercise existing measures such as Code of Practice 9 – which does not cause delays for all businesses but is instead specific to those consistently targeting the system.
- ACCA would support a move to simplify and adopt a consistent time based approach for all tax relief claims and enquiry periods. This would see some relief and enquiry periods extended, while others would be reduced. This consistency in approach would simplify the system and present efficiency gain opportunities for HMRC, agents and taxpayers.
- On behavioural based penalties ACCA favours a regime built on innocence in the knowledge that the majority of taxpayers have taken reasonable care when navigating a complex tax regime, especially areas that are infrequent for many taxpayers including Capital Gains Tax and Inheritance Tax.
- Inbuilt complexity in behavioural penalties present a range of challenges. A shift away from the current approach and towards a more modern approach such as the VAT points-based system would present a range of benefits, including greater efficiency and transparency.
To read the response in full, please download the consultation response document on this page.
