ICAEW.com works better with JavaScript enabled.

Concerns at HMRC seeking new powers

Tax expert, Jason Collins, questions HMRC's plans to amend its civil information powers.

One tax expert has raised concerns about plans set out in a current consultation, according to a piece over on Out-Law.com.

Jason Collins, of Pinsent Masons, the law firm behind Out-Law.com, draws attention to certain aspects of the consultation, which closes on 2 October 2018.

‘HM Revenue and Customs (HMRC) in the UK is seeking “unprecedented” powers to obtain information about taxpayers without independent oversight from the tax tribunal, a tax expert has said’, says the piece.

These plans could allow HMRC to request information from ‘financial institutions, accountants, lawyers, estate agents and other third parties that hold information about taxpayers without first seeking approval from the tax tribunal’.

This will speed up the process for the HMRC, but Jason Collins speculates about downsides.

Fit for purpose

‘The consultation seeks views on potential improvements to HMRC’s power to obtain relevant information about taxpayers from third parties, contained in schedule 36 of the 2008 Finance Act’, the piece says.

‘HMRC is concerned that this power, which can be traced back to the 1970s, is no longer fit for purpose given the extent to which financial information is now held electronically.’

But could their new proposals overstep the mark?

The consultation proposes ‘a new ‘financial institution’ information request right, which would allow HMRC to obtain bank statements, transaction histories and other basic banking information “reasonably required to check a taxpayers’ tax position” without tribunal approval’, says the piece.

Essential check

‘Collins said that information requests covering basic bank account information were likely to become more frequent following the introduction of the Common Reporting Standard (CRS), through which overseas tax authorities will automatically receive data on taxpayers’ UK accounts. However, obtaining prior consent from the tribunal in other cases was an “essential check” which “helps safeguard taxpayers against fishing expeditions”, he said.’

Are you concerned?

‘Oversight by the tribunal will be more important in these cases to ensure that HMRC is not overstepping the mark’, is Jason Collins’ view.

There’s much more detail in the piece. Read it in full over on Out-Law.com.

August 2018