Cullinane: HMRC power grab is a step too far

The House of Lords economic affairs committee is right to call for a new review of HMRC powers as the tax authority over-reaches itself with spurious tribunals and exhaustive investigations, not to mention the introduction of a 12-year time limit set out in Finance Bill 2018-19, says John Cullinane CTA, tax policy director at the Chartered Institute of Taxation

HMRC needs substantial powers to enable it to collect the taxes due to it. Few would argue with that. But every year one or more Finance Acts extends these powers further. The CIOT’s objectives for the tax system include ‘a fair balance between the powers of tax collectors and the rights of taxpayers’, but the balance seems to be tilting more and more in one direction. It is time to take stock.

The proposal in this year’s Finance Bill 2018-19 (FB 2018-19) for an extension of offshore time limits is a case in point.

Strong powers to tackle offshore evasion are justified, but HMRC can already go back 20 years where there is evidence of concealment or dishonesty.

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