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HMRC’s use of certain powers – Tell us about your experience

Published on 6 February 2020

HMRC are seeking evidence on the implementation of new powers given to them since 2012. By ‘powers’, we mean things that HMRC are allowed to do or to ask you to do – simple examples would be them asking you to fill in a tax return or charging you a penalty.


LITRG, along with CIOT and ATT, are members of HMRC’s Powers and Customer Safeguards Implementation Evaluation Forum which has been set up to provide expert input to HMRC on this evaluation. The forum’s current focus is to establish whether HMRC’s use of the new powers when engaging with people has been carried out in accordance with certain principles that were established in 2012.

If you have experience of HMRC’s use of any of the powers listed below, it would be really helpful if you could share that with us via the Contact Us page by the 20 February 2020.

The report is due to be with the Financial Secretary to the Treasury by the end of April 2020. That requires the forum to be very selective in the powers which it considers in detail. It has provisionally identified certain powers as a priority and others which are of a lower priority. We are keen to hear from anyone affected by:

  • Requirement to correct past offshore tax non-compliance - HMRC required taxpayers to correct offshore tax non-compliance committed prior to 6 April 2017, such as undisclosed foreign bank interest or pension income, by 30 September 2018. If the taxpayer failed to do so, they are liable to harsh ‘Failure to Correct’ penalties of between 100% and 200% of the tax unpaid
  • Extending offshore time limits – the assessment time limits have been extended so that HMRC can assess up to 12 years of back taxes without needing to prove careless or deliberate behaviour, in cases where an offshore matter or offshore transfer is involved
  • Penalties for inaccuracies in a document, such as a tax return, submitted to HMRC - removal of defence of relying on non-independent advice as taking ‘reasonable care’ when an individual has used a tax avoidance scheme
  • Coding out of debt – HMRC are able to alter PAYE codes in order to collect Self Assessment debt from a taxpayer’s income
  • Direct recovery of debt  - HMRC are able to recover debt directly from taxpayers’ bank accounts, if they owe over £1,000 of tax or tax credits debt, have the means to pay and have been contacted multiple times by HMRC about payment. HMRC will always leave a minimum of £5,000 across a debtor’s accounts.

The principles against which these powers are to be tested are:

Powers and the statutory obligations they impose need to be:

  • set within a clear statutory framework,
  • easily understood—by taxpayers, their agents and HMRC staff,
  • straightforward to comply with,
  • proportionate to what HMRC needs to discharge its responsibilities or to protect the Exchequer from the risk assessed,
  • used consistently,
  • effective in providing the information HMRC needs to assess risk, and
  • effective in discovering and dealing with non-compliance and in helping people to return to compliance.

Safeguards for citizens and businesses must be:

  • clear,
  • publicised,
  • accessible,
  • effective,
  • responsive to the nature and purpose of particular powers and sanctions, and
  • conformant with human rights and other relevant non-tax legislation.

Sanctions for non-compliance must be:

  • set in statute,
  • clear and publicised,
  • proportionate to the offence,
  • used consistently, and
  • effective in deterring non-compliance and returning the non-compliant to compliance.

If you are a member of the CIOT or ATT – please respond to the call for evidence on their respective websites.


Contact: Victoria Todd (please use form at Contact Us) or follow us on Twitter: @litrgnews

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