House of Lords Committee reports on HMRC powers

Dec 10, 2018

Last week the House of Lords Economic Affairs Committee published “The Powers of HMRC: Treating Taxpayers fairly”. According to the report, the Government’s approach does not appear to discriminate effectively between the full range of behaviours and circumstances it describes as tax avoidance.

There is a clear difference in culpability, for example, between deliberate and contrived tax avoidance by sophisticated, high income individuals, and uninformed or naive decisions by unrepresented taxpayers. The Committee recommends that a clearer distinctions is needed in the Government’s approach and rhetoric towards tax avoidance.

The proposed extension to offshore time limits to 12 years currently contained in Finance Bill 2019 came in for particular criticism, with the Committee saying this power is “unreasonably onerous and disproportionate to the risk”. The Northern Ireland Tax Committee in its response to the original consultation on this power expressed similar concerns.