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| Subjective wording removed from Finance Bill |
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The Chartered Institute of Taxation (CIOT) welcomes the removal of the wording ‘HMRC thinks’ from the Finance Bill 2007. The wording was to be used in relation to penalties. In its response summary document to the Finance Bill 2007, the Institute said that it objected to the phrase ‘HMRC think that’ in clauses 1, 2 and 3 of the draft legislation, and similar phraseology in clauses 8 to 11, believing that it is too wide-ranging a phrase. In its response document, the CIOT said "Where penalties are concerned, the test should always be objective rather than subjective. We believe that in the proposed legislation the words ‘HMRC think that’ are superfluous. The words come from legislation where the inspector is exercising judgement. In the case of penalties, that is not the position. Either there has been an offence giving rise to a penalty or there has not. The penalty follows from what the taxpayer did and from nothing else. These words are not needed.” The same point regarding use of this phrase has arisen in connection with the draft New Management Act. In view of HMRC’s intention to move towards ‘light touch interventions’ as a method of enquiring into and possibly assessing individuals, the CIOT is even more concerned about the possible impact of such vague terms. Such wording would open the possibility of HMRC not only assessing but also raising a penalty where they suspected that a return was incorrect on account of the results of a risk assessment output, as opposed to any hard evidence. The Institute strongly recommended that in each case the words ‘HMRC think that’ were removed. On hearing the news that the Government has agreed to remove the wording, Rob Ellerby, CIOT President, said “The removal of the phrase ‘HMRC thinks’ will make the legislation work better, one of the main aims of the CIOT.” Links Finance Bill 2007: Comments of The Chartered Institute of Taxation |
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Wednesday, 23 May 2007 | 1011 Hits |
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