The Institute’s Tax Faculty insists the plan would damage the Revenue’s obligation of taxpayer confidentiality that underpins the tax system and provides the basis for tax compliance.
Robert Maas, chairman of the Tax Faculty’s Technical Committee and Accountancy Age columnist, said: ‘I cannot see the point in giving the Inland Revenue powers to assess tax on sums where no source can be identified. If the National Confiscation Agency can strip 100% of criminal proceeds, it seems pointless to allow the Inland Revenue to take away only up to 40%.’
The government’s intention to form a national confiscation agency was outlined in last week’s Queen’s speech. It formed a part of the Draft Proceeds of Crime Bill, which proposed increased state clout to fight money laundering and allowing Revenue officials power to disclose financial information to the police to support prosecutions.
But Maas believes that the measures will mean taxpayers will no longer trust the Revenue and those with something to hide will be discouraged from declaring all income and gains.
‘No-one, whose non-compliance with tax obligations is under investigation, will accept the offer of protection currently offered in return for complete openness if he or she believes there is the slightest chance the information will be used in Court,’ he said.
The Institute’s Tax Faculty insists that extensive public consultation is essential to ensure that citizens’ rights remain intact.
Queen’s Speech 2000