The inquiry, led by the as a sub-committee of the Treasury select committee, is inviting written submissions addressing any of a number of issues. These include looking at how HMRC governance and settlement processes affect its ability to resolve tax disputes in a proportionate and fair way; and whether HMRC’s litigation and settlement strategy provides a rational and sound framework for resolving tax disputes.

The committee is interested in views on whether HMRC’s collection and management powers set out in the Commissioners for Revenue and Customs Act 2005 provide the tax authority with sufficient flexibility to achieve cost-effective and fair results.

It also wants to know if HMRC’s approach to enforcing compliance with tax law, including its approach to penalties and other sanctions, can result in disproportionate or unjust outcomes. If that is the case, MPs want suggestions for how the situation can be remedied.

The committee is also looking at whether there is sufficient governance over the whole of HMRC’s enquiry process to ensure that HMRC’s interventions are well-targeted and that taxpayers are treated fairly and professionally throughout, and at whether HMRC’s governance processes provide sufficient scrutiny and assurance for clearances and approvals given to taxpayers outside the formal enquiry process.

George Bull, RSM senior tax partner, said: ‘Although HMRC has internal governance processes which are intended to ensure that it deals with all tax disputes fairly and in an even-handed manner, hardly a week passes without a tax tribunal making a finding against HMRC because of the way it has handled aspects of a dispute.

‘Often, tribunal cases raise questions about basic record-keeping and controls within HMRC. Other cases leave observers wondering about the decision-making processes within HMRC which resulted in small or questionable appeals being heard at considerable public expense.

‘And then there's the use of HMRC powers. Quite reasonably, Parliament has given HMRC substantial statutory powers to do what by any standards is a very difficult job. But too often the way in which the power is used, or the powers which HMRC invokes in a particular situation, appears disproportionate and heavy-handed.

‘It's in everybody's interest that HMRC is properly equipped to deal with tax disputes, but the growing concerns I have outlined above seem to be behind the Treasury Sub-Committee's decision to examine HMRC's approach to conducting tax enquiries, resolving tax disputes and determining the amount of tax to be paid.’

The deadline for submitting written submissions to the inquiry is  31 May.

The Conduct of Tax Enquiries and the Resolution of Tax Disputes inquiry