HMRC should formulate tax policy, claims ACCA

TAX POLICY-MAKING should be moved from HM Treasury to HM Revenue & Customs, the head of tax at ACCA has said.

Chas Roy-Chowdhury appeared before the House of Lords Finance Bill committee last week to discuss the performance of HMRC, disguised remuneration and corporation tax.

He told the Lords that the Treasury does not have the necessary expertise to develop tax policy. “We also did not see any problems about tax policy moving across to the Treasury but I think that is now a problem,” he said. “I think tax policy is in the wrong place. It ought to go back into HMRC. HMRC has the tax expertise.

“The Treasury has the economists, who have not probably ever dealt with tax, so we need to bring it back into HMRC, where the proper consultation happens, where there is proper expertise and where there is proper policy formulation.”

If this were to happen, HMRC would benefit further from “greater fertilisation from the private sector”. This would increase commercial awareness in the Revenue and “these people would actually engender a greater awareness of what taxpayers are up against,” he added.

Frank Haskew, head of tax at ICAEW, told the committee that there had to be better communication between the Treasury and HMRC. “HMRC has lots of practical expertise. I think the concern at the beginning of this process was that HM Treasury was not taking enough notice of HMRC’s practical experience, yet they are in the same building,” he said.