Rights Act hits tax.

The UK government is being forced to change tax laws in advance of the European Union-driven Human Rights Act, which comes into force next month.

Tax experts say the act is behind changes to ‘search and seizure’ hearings, and to Customs’ new conciliatory approach to VAT investigations.

Ian Mills, tax partner at Pannell Kerr Forster, pointed to changes in the ‘search and seizure’ procedure as evidence that the Human Rights Act is already being anticipated in UK legislation.

Under the Taxes Management Act, taxpayers and their agents are denied the right to attend application hearings for search and seizure orders.

Mills said: ‘This could be regarded as prejudicing the human rights of the taxpayer. One would assume that where legally the taxpayer is affected, he would be allowed to attend the hearing.’

But under new powers, introduced under the Finance Act 2000, the taxpayer, or his agent, will have the right of attendance at any such hearing.

PKF also argued that the new VAT investigation process could have been influenced by the new act. Currently, cases involving more than #75,000 are liable for criminal prosecution, those below would involve civil proceedings.

Phil Jeffrey, PKF’s VAT expert, said: ‘This is an arbitrary figure, and in reality many cases were not being prosecuted. Often it means that someone in one part of the country was prosecuted while someone elsewhere would not be.’

Customs’ ‘conciliatory’ approach

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