THE TAXMAN should have greater input in the formulation of tax policy, according to Treasury Select Committee chairman Andrew Tyrie MP.
Speaking at the CIoT’s Tax Advisers’ Address in Westminster, Tyrie said he felt it was necessary to “beef up HMRC’s policy-making role”, adding “HMRC is blamed far too easily”.
HMRC’s current role is solely to implement policy drawn up by the Treasury and has recently come under fire for mistakes including sending out 12,000 penalty notices in error and taking the wrong tax from a sixth of taxpayers.
Tyrie, though, felt that greater involvement in the policy-making process would allow HMRC to interpret policy better and more effectively administer taxes.
Bill Dodwell, tax partner at Deloitte, was supportive of “strengthening the policy capability at both HMRC and the Treasury.
“There are some excellent people there, but there aren’t enough of them at the Treasury, and at HMRC there isn’t really a policy division. We need more deep expertise in policy generally.”
Philip Fisher of PKF was also supportive, but was keen to point out that the Revenue do have some input in policy-making already. He did not, though, see any harm in strengthening ties.
“I can see significant advantages in having greater Revenue involvement,” he said. “Most people assume that if there’s something that doesn’t work, it’s down to the Revenue, and I don’t think that is the case.
“Even if it achieved nothing at all, if you had them closer together, there would be the possibility that something good would come of it. If you turn it around, you ask the question: ‘how can it make anything worse?’ If you can involve people with a deep level of knowledge and aren’t going to slow down the process, then it could be very good.”
For their part, the Treasury said they already worked very closely with the Revenue.
A spokesperson said: “The Treasury and HMRC are jointly responsible for tax policy through the policy partnership set up following the O’Donnell review in 2004. As a result of this partnership, the Treasury and HMRC tax policy teams work very closely together in the development of tax policy reforms. Advice to Ministers reflects input and views from both departments.”
Tyrie also had concerns about retrospective taxation, including general anti-tax abuse rule (GAAR), which the government will be consulting on later this year.
“There are two arguments for retrospection: moral and the intention of Parliament,” he said, warning that “retrospection can lead to government acting arbitrarily”.
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
Since the release of HMRC’s plans for digital tax reforms, many have agreed with the call for a delay
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government