Tax experts from the Scots ICA and Chartered Institute of Taxationon are set to launch a joint assault on the government if it fails to respond to their recommendations for self-assessment.
The institutes promised to demand a royal commission to overcome complexities in the tax system, increased investment to improve data storage and transfer, and copies of PAYE coding notices to be sent to tax agents as well as clients unless changes were made.
The need for change was made clear by the fact that up to 700,000 of the nine million tax returns issued are still outstanding following the 31 January deadline.
Hywel Jones, a technical officer at the CIoT, said: Without a simpler tax system, self-assessment will be impossible to achieve.’
Derek Allen, the Scots ICA’s head of taxation, said the problems stem from a lack of planning for self-assessment. He said this was exacerbated by attempts to save money, leading to ‘false economies’, although the Revenue had benefited from an improved cash flow of #3.5bn due to the new regime.
He said failure of the Revenue to update its computer system had also ’caused a lot of ill-feeling.’
Allen also criticised the government’s surcharging of payers, in the last few days before the payment deadline, who were wrongly identified as late payers. Another area of contention is the imposition of penalties on taxpayers who are awaiting rebates from the Revenue. The move follows research by the institute on its member firms, in conjunction with the Confederation of British Industry in Scotland and the Scottish Law Society.
Allen said the Revenue caused more problems by slavishly adhering to the penalty regime devised in 1994 which does not reflect the current scenario. He said the Revenue failed to exercise its ability to mitigate certain cases.
ACCA has criticised the Revenue’s demand that taxpayers and accountants reply to their enquiries in 30 days, yet the Revenue can take up to 12 weeks to reply to letters. Mavis Sargent of the institute’s taxation committee said: ‘To threaten draconian penalties in the course of routine correspondence is totally unreasonable.’
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