13 January 2010
Titles that covered this article include the Financial Times, 16 January 2010, and the Daily Telegraph, 10 January 2010.
- Enhanced powers and aggressive tax collection methods increasingly contested by taxpayers
- Better integration of HMRC’s departments frees up more resources to claw back tax
Latest data shows that tougher tax collecting tactics and penalties imposed by HM Revenue & Customs (HMRC) have contributed to a 14% increase in appeals to tax tribunals in 2008 by taxpayers claiming to be overtaxed or unfairly punished, says UHY Hacker Young.
Figures obtained by UHY Hacker Young show that the number of cases received by the VAT and Duties Tribunal and the Special Commissioners Tribunal has increased from 4,311 in 2007 to 4,897 during 2008 . The VAT and Duties Tribunals and the Special Commissioners heard appeals lodged by taxpayers against decisions made by HMRC.
UHY Hacker Young says that HMRC’s introduction of a new “Litigation and Settlement Strategy” under which it pledges to fight a case through the courts rather than negotiate a settlement if it believes “it has a strong enough case”, has also helped drive up the number of cases heard by the tax tribunals.
Roy Maugham, Tax Partner at UHY Hacker Young, comments: “HMRC’s increasingly aggressive approach to tax collection and litigation has resulted in the soaring number of appeals to tax tribunals over the last few years.”
“HMRC seems to be less and less deterred by the cost of litigation. It is now much more prepared to go all the way through the Tribunals rather than negotiate a fair settlement with the taxpayer as it used to. It is doubtful whether this is the most effective and pragmatic way to solve problems.”
UHY Hacker Young says that HMRC has received significantly enhanced powers over the last few years which, coupled with instructions from the Government to pursue tax evasion more aggressively, has led to more disputes with taxpayers.
Adds Roy Maugham: “HMRC’s powers have been expanded enormously over the last few years to the point where many taxpayers feel that their civil liberties are being infringed.”
UHY Hacker Young says that with public debt rising to record levels, there is growing pressure on HMRC to dramatically boost the amount of tax collected.
Says Roy Maugham: “HMRC is under more pressure than ever to maximise the tax take. The Treasury needs every penny it can get its hands on.”
“For example, the Government has just doubled the maximum penalty for tax evasion in relation to offshore bank accounts from 100% to 200%.”
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