There has been strong criticism of the complexity of HMRC’s enquiry and assessment powers, and penalty system, with many stakeholders calling for simplification.

Most of HMRC’s enquiry and assessment powers are regime specific and spread across multiple, separate pieces of legislation. This means that HMRC’s differing compliance checks ‘add to complexity, create uncertainty, undermine trust and willingness or ability to comply with the process, and can result in the perception of unfair outcomes’, HMRC admitted in the review document.

The latest consultation focuses on HMRC’s enquiry and assessment powers, penalties, and safeguards.

One of the options is to adopt a consistent approach to enquiries and assessment powers across all taxes, as operates in Ireland, Australia and Canada. Another is to review the powers and introduce a common approach where possible, accepting that some taxes would require specific treatment.