Select committee: Finance Bill Sub-Committee
Recommendation 25
4th Report - New powers for HMRC: fair and proportionate?
Published 19 Dec 2020
Paragraph 122
Finance Bill Sub-Committee Draft Finance Bill 2021 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We recommend that: The requirement for tribunal approval for a third-party information request to a financial institution should remain; Financial institutions should have a right of appeal against any request they consider unduly onerous; The Government should clarify the interaction between the use of Financial Information Notices for debt collection and the direct recovery of debt provisions, and ensure that the safeguards for Financial Information Notices relating to debt are no less stringent than those for direct recovery of debt; HMRC should review the whole process for dealing with international information requests requiring tribunal approval, working with financial institutions, the tax tribunal and others, to find other means of streamlining the process; and Given the lack of consultation, HMRC should reconsider the implementation date. In doing so, they should undertake further consultation and communication to ensure that financial institutions are fully appraised of the implications of the measures and have sufficient time to prepare for them. Any revised implementation date should be determined in light of this consultation.
From: Finance Bill Sub-Committee, 4th Report - New powers for HMRC: fair and proportionate?, paragraph 122, 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.