LITRG welcomes HMRC rethink on Extra-statutory Concession A19 review

18/04/2013, by Low Incomes Tax Reform Group, Tax News - Income Tax

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HM Revenue & Customs (HMRC) will not now be revising the scope and terms of ESC A19 as originally proposed. LITRG welcomes this result of the consultation.

Background

HMRC published their summary of responses to the consultation on possible changes to the operation of ESC A19 on 9 April 2013. ESC A19 performs a very important function, serving to provide fairness to taxpayers when HMRC have made a mistake. In particular, ESC A19 gives HMRC discretion not to collect arrears of income tax and capital gains tax, if they have delayed in acting on relevant information in their possession.

The concession only applies where the taxpayer could have reasonably believed their tax affairs were in order.

The consultation

LITRG is pleased that HMRC have taken most of its comments on board. The LITRG’s view (also expressed in the responses of other bodies to the consultation) was that the proposed changes were premature and too weighted in HMRC’s favour. The group strongly recommended not making changes to when ESC A19 should apply; rather it suggested that there should be improvements in the operation of the concession.

HMRC had proposed to revise the concession, with the aim of improving clarity and objectivity, but the revised text would have made significant changes to the concession and the circumstances in which it would apply. LITRG drew attention to the fact that it is very often the unrepresented taxpayer who is affected by the problems which lead to claims under ESC A19.

The outcome

In response, HMRC have committed to improving information and guidance for taxpayers and also to developing their guidance and training for staff. In addition, they will not revise the scope and terms of the concession at this stage; instead, they will monitor the application of the concession before making any changes to it.

Existing LITRG guidance material remains valid, and the group will continue to monitor the position.

The consultation document, LITRG’s response and HMRC’s summary of responses document can be accessed from the LITRG website.

About The Author

The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation to give a voice to those who cannot afford to pay for tax advice. LITRG comprises tax specialists from professional practice and the voluntary sector, from publishing and from HM Revenue & Customs, together with people from a welfare benefits and social policy background. Visit www.litrg.org.uk for further information.

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