Select committee: Finance Bill Sub-Committee
Conclusion 13
4th Report - New powers for HMRC: fair and proportionate?
Published 19 Dec 2020
Paragraph 59
Finance Bill Sub-Committee Draft Finance Bill 2021 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
In our 2018 report we recommended that new powers should be accompanied by a right of appeal against the exercise of the power and not just against the underlying tax liability. This is not the case in the draft Finance Bill clauses. Although we acknowledge that at some point a right to appeal may be available, this will generally only be available later, by which point the relevant person will have had to deal with the consequences of HMRC’s exercise of its new power, including being named as a promoter. Whilst we appreciate HMRC’s concerns about promoters abusing safeguards, we regret that the measures do not include anything more than HMRC discretion as the means of protecting mainstream advisers from being caught.
From: Finance Bill Sub-Committee, 4th Report - New powers for HMRC: fair and proportionate?, paragraph 59, 19 December 2020
Government response
The government responded to the whole report on 19 February 2021 (deadline 19 February 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government states that it "has accepted nine recommendations and partially accepted six" of the Sub-Committee's report on new HMRC powers, and declines the others.
- On promoters of tax avoidance schemes, it accepts that DAC6 should no longer be a POTAS trigger, and says it "will consult this spring on a further package of measures" so that promoters face stronger sanctions more quickly.
- It does not accept the recommendations to keep tribunal approval for financial institution information requests, or to give a right of appeal, stating that the UK "will be unable to meet the international standard" if tribunal approval remains.
- On unregulated tax advisers it partially accepts the recommendation, stating that, "as a first step", it is "exploring making professional indemnity insurance a compulsory requirement" and will consult on the design of this proposal.
- On notifying uncertain tax treatment it does not accept a new Stage 1 consultation, but "will launch a further Stage 2 consultation" before publishing draft legislation for technical consultation.