Select committee: Finance Bill Sub-Committee
Recommendation 41
4th Report - New powers for HMRC: fair and proportionate?
Published 19 Dec 2020
Paragraph 194
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)
Conditionality is an unproven policy. It remains to be seen whether it will achieve the Government’s objectives for it. The Government should proceed cautiously. We recommend: Before conditionality is applied to other sectors, the effectiveness of the legislation in the private hire vehicle, taxi and scrap metal sectors should be evaluated. This evaluation should look separately at the educational and information element relating to applicants for new licences, and at the impact of the tax checks, in particular whether it has led to unintended consequences, such as an increase in unlicensed operations; The application of conditionality to other sectors should be justified by reference to a specific problem in the relevant sector; and Before introducing tax checks, HMRC should work with stakeholders to communicate clearly to applicants for licences what the tax check is for and what it consists of, bearing in mind the diversity of the sector and the need to cater for those who cannot be reached using digital methods and for whom English is not their first language.
From: Finance Bill Sub-Committee, 4th Report - New powers for HMRC: fair and proportionate?, paragraph 194, 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.