LITRG welcomes HMRC rethink on Extra-statutory Concession A19 review

Published on 12 April 2013

HM Revenue & Customs (HMRC) have confirmed that they will not revise the scope and terms of Extra-statutory Concession A19 (ESC A19) as originally proposed in their recent consultation document. This is very welcome news as not only we, but many other bodies too, confirmed that the proposed changes were premature and far too weighted in HMRC’s favour.

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.

We are pleased that HMRC have taken most of our comments on board. Our response to the consultation strongly recommended not making changes to when ESC A19 should apply; rather we 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. We particularly 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.

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 we will continue to monitor the position and remain involved in discussions with HMRC about the current operation of the concession and its future form.

To see the summary of responses document, please use the link below:

HMRC Summary of responses document

The LITRG response

The consultation document

(12-04-13)

Contact: Robin Williamson (please use form at http://www.litrg.org.uk/ContactUs)