ICAS voices concerns over HMRC's penalty powers

The taxman will not be objective in deciding whether taxpayers’ behaviour is
reasonable if they have not padi the right tax, warns
ICAS
.

Responding to HM Revenue &
Customs’ plan for a single penalty regime for underpayment or
non-payment of taxes, ICAS warned that the legislation introduces concepts of
what behaviour is reasonable without defining what is expected of taxpayers.

As the ultimate arbiter in any dispute, the tax inspector will always have a
‘less than objective opinion’ in any tax dispute, the institute stated.

Under the plans, employers would also be penalised for unpaid tax, despite
the employees dodging payments.

The institute wants HMRC to strengthen taxpayers’ safeguards, reconsider
proposals to impose penalties where there has not been a loss of tax, and look
again at penalising employers for employees’ misdemeanors.

‘We are concerned that the legislation introduces new concepts about what
behaviour is reasonable and fails to define adequately what the State expects a
taxpayer to do to achieve the standard of reasonable care,’ said ICAS’ Bob
Crawford.

Further reading:

CIoT warns of HMRC powers abuse

Overview: shades of Gray

HMRC targets non-domiciled taxpayers