For some years H M Revenue & Customs (HMRC) have had a method whereby they could reduce tax liabilities in cases where errors had been made by their own staff. This concession (ESC A19) effectively gives a taxpayer the right to request HMRC reduce (or even eliminate) tax bills where the revenue staff have not made timely use of information provided.
HMRC wanted to put the concession into a firm statutory footing and produced draft legislation for consultation in July 2012 that would have effectively ended the concession for taxpayers who had a ‘reasonable belief’ that their taxation affairs were in order, even where exceptional circumstances occurred during the year. Instead taxpayers were to be made responsible for all of their own affairs, effectively absolving HMRC from responsibility in the process.
These proposals were met with a deluge of objections from across the Accounting & Taxation professions and in what is undoubtedly a victory for common sense HMRC have finally backed down and confirmed that the concession is here to stay.
For now at least!
Much has been made in recent years about the tax planning community, but this is just one of many cases that highlight that HMRC cannot be allowed to have free reign over setting of legislation, or indeed too hasty changing of the existing regime without proper and thorough consultation with all interested parties.
As always, our team of Taxation experts are working tirelessly for clients to ensure their interests are represented at all times in dealings with HMRC. Contact us today on 0845 177 5500 or online to see how we can help you.