TWO NEW SETS of data relating to HM Revenue & Customs paint a picture about its increasingly robust efforts to increase the tax take.
The taxman has scooped an extra £19.5bn in tax during 2013 than in 2012. An increase of this size is due to a multitude of factors, including it being a signal of improving economic conditions. Increases were seen in income tax, NI, VAT and stamp duty receipts.
More people at work – as witnessed from the latest employment figures – is likely to increase VAT. Job stabilisation, plus a more benign mortgage environment, saw more than a million property transactions in 2013. Advisers expect more transactions before 5 April, when the period of ownership for principal private residence relief is cut to 18 months from 36 months.
But with the taxman under increasing pressure from the Treasury, and more publically from the Public Accounts Committee, to be more efficient at tax collection, it seems that taxpayers are unhappy with the taxman’s decision-making.
The number of HMRC decisions challenged through Judicial Review requests leaped 31% in a year. There were 51 applications for a review in 2012 (the most recent data available) compared to 39 in 2011.
A judicial review is a legal procedure for individuals and organisations to challenge what they see as unlawful, or unreasonable, decisions made by government and other public bodies.
“This significant jump in the number of applications shows just how contentious some of HMRC’s decisions have become,” according to Pinsent Masons tax head Jason Collins.
“Although not all of these disputes will progress all the way to a full judicial review hearing, this surge in challenges reflects taxpayers’ reaction to the increasingly aggressive stance taken by HMRC to increase its tax take and clamp down on tax avoidance and evasion.”
However, there are concerns that a recent government consultation on the judicial review system could see the scope for taxpayers to be heard, reduced.
“Any proposals which limit scrutiny over how HMRC goes about its business could ultimately have a negative effect on the quality of the tax authority’s work.”
CIot urges HMRC to consider a delay to the 1 September 2017 introduction of its new corporate offence of failure to prevent the criminal facilitation of tax evasion
HMRC intends to extend the date for withdrawal of transitional relief on investment growth from 30 November 2016 to 31 March 2017
The current business rates system is over-complex and reform is needed, but reforms should focus first of all on simplifying the appeals process, particularly for businesses which are subject to business rates exemption
The CIoT has called on the government to rethink its approach to ensuring online sellers pay the correct amount of VAT.