Select committee: Finance Bill Sub-Committee
Conclusion 30
4th Report - New powers for HMRC: fair and proportionate?
Published 19 Dec 2020
Paragraph 148
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)
We are concerned that HMRC did not recognise the likely difficulty of applying the test for uncertain tax treatments when the policy was being formulated for consultation. Tax obligations should be based on objective criteria that can be easily understood, and a business should not have to second guess HMRC to know if it is subject to a tax obligation. We therefore welcome the Government’s acceptance that it got the test for uncertain tax treatments wrong.
From: Finance Bill Sub-Committee, 4th Report - New powers for HMRC: fair and proportionate?, paragraph 148, 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.