Draft Finance Bill 2017: Errors in taxpayers' documents
LITRG are concerned that the provisions in clause 91 are drawn far too widely and that they may unintentionally catch unrepresented taxpayers, who have not engaged in the type of tax avoidance that HMRC intend to target. We are strongly opposed to and do not agree with the proposal to reverse the burden of proof, meaning that HMRC will presume the taxpayer has been careless unless they can prove they have taken reasonable care. This will become particularly difficult for taxpayers to do, as the provisions also restrict the type of advice on which the taxpayer can rely to prove they took reasonable care.
We are hugely concerned that the provisions place an insurmountable burden on unrepresented taxpayers, who: may enter into arrangements without fully understanding that they are caught; may not appreciate the need to obtain specific advice, or indeed be able to afford advice; and may not be able to judge whether or not an adviser has the appropriate legal or tax expertise to advise on the arrangements.
The LITRG submission can be found here: Draft Finance Bill 2017: Errors in Taxpayers’ Documents – LITRG response