Tax inspectors to be brought to book

Tax inspectors could be disciplined if they fail to follow official guidance,
under proposals in the consultation on modernising the taxman’s powers.

The call was one of several suggestions made on how to protect and safeguard
the rights of taxpayers. Other proposals called for HM Revenue & Customs to
put more effort into helping taxpayers get things right and allow deductions for
legitimate compliance costs.

‘I am very supportive of this idea. The taxman is very quick to challenge
advisers who mistakenly advise a client, so why shouldn’t tax inspectors be held
accountable for their errors in a similar way,’ said Grant Thornton tax partner
Mike Warburton.

The reliability of HMRC guidance and the consistency of its application have
long been bugbears for advisers and taxpayers, who have claimed that too often
individual tax inspectors develop interpretations that do not follow general

Responses to the consultation added that in some cases guidance was too
complex and not updated regularly enough, making it difficult for taxpayers to

Guidance released on the internet was very hard to locate and needed to be
displayed in a more coherent manner.

HMRC is to draw up a new Taxpayers’ Charter, it said last week, as another
part of the proposals, which have also seen the department put on hold plans to
collect tax debts direct from individual bank accounts.

It does plan, however, to introduce powers to offset repayments of one tax
against liabilities for another owed by an individual and to allow taxpayers to
pay their bills with credit cards.

The charter is seen as a crucial document for improving relations between
advisers and HMRC, as it will address concerns that some officers do not adhere
to various codes of practice and set a reference point for judging HMRC’s

The government has asked HMRC to begin work on drafting a charter. The
department is now planning a series of meetings with tax experts and
representative bodies to begin compiling the document, which could receive full
legislative backing once it is completed.

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