Tax appeals system targeted for reform

A major overhaul of the tax appeals system is urgently needed to clear up the ‘maze of provisions’ baffling taxpayers and practitioners alike, claims the Institute of Fiscal Studies’ tax law review committee (TLRC).

Long-term aims of the committee include developing a two-tier tribunal system, with appropriately qualified members, covering all taxes with a single procedure and cutting the layers appeals must pass through before a matter is finally determined.

TLRC chairman Graham Aaronson QC said: ‘The tax appeals system has developed piecemeal for 200 years without any comprehensive underlying strategy that we can detect.

‘Reform is long overdue and self-assessment adds to the urgency for reform.

The committee believes its proposals offer a workable and effective appeals system for taxpayers and revenue departments alike.’

Committee members, including tax tribunal users and judges from all levels, decided after a two-year review that there are serious weaknesses in the system. Measures immediately called for include improvements in the methods of selecting general commissioners for local direct tax tribunals and boosting commissioners’ resources and training.

Other early changes demanded include ensuring there is a core of judges with regular tax appeal experience in the High Court and redrafting tax appeals legislation to eliminate anomalies and inconsistencies.

Simon McKie, a partner at Robson Rhodes and chairman of the English ICA’s tax faculty, said: ‘It used to be the case that tax case judges were specialists, but that changed. Everyone who deals with the courts is very concerned that cases are dealt with by judges who do not have a full understanding of tax law.’

Taxpayers back higher public spending, even if taxes have to rise, according to an IFS study.

But set against this, most people think their own taxes are already too high. The British Social Attitudes survey claims the public are less likely to advocate higher spending when the personal tax consequences are spelled out for them. The study states that 64% of people would support higher spending on health and 52% on education even if it involved a tax hike.