NIC appeal systems come under review and are found wanting

Procedures designed to resolve National Insurance disputes will not provide justice for taxpayers, the tax law review committee said this week.

Reforms aimed at modernising the NI appeals procedure form part of the Social Security bill currently working its way through Parliament. But tax experts have urged the government to rethink its proposals, and the TLRC has backed a series of amendments proposed by Lord Goodhart.

John Avery Jones, the TLRC’s chairman, said the bill did not go far enough. ‘It could confuse matters further for those wishing to appeal against their NI liability.’

He added: ‘NIC disputes on matters relating to employment status, liability and avoidance should be heard by tax tribunals, and become part of the mainstream tax-appeals system.’

The TLRC’s demand follows its appeal to the government to consolidate the Inland Revenue and Customs & Excise tax appeals systems last month. The committee is determined to ensure a ‘straightforward and consistent’ appeals system exists for all tax disputes.

The report adds: ‘People need direct and easy access to justice. Using separate procedures to determine a matter which raises the same legal issues is not helpful. Continuing to use two separate procedures increases the chance of inconsistency and unfairness between individuals.’

A significant barrier standing in the way of the TLRC is the fact that NI is not a tax and a person’s contribution record has some effect on benefits. But the committee argued NIC liability is a separate issue.

If the committee fails in its bid to unify the appeals structure, it has issued a fallback proposal for appeal tribunals to contain members with tax expertise and everyone sitting on a tribunal to be trained in basic tax law.

Related reading