Tax Faculty responds to the consultation
The Tax Faculty has published our response to HMRC’s consultation document on Working with tax agents: the next stage. Our response is published as TAXREP 11/10.
The HMRC consultation was published with the December 2009 PBR – we summarised the proposals at the time and have discussed it subsequently on our website.
The Faculty is concerned that the proposed measures will not have the support of the tax agent community. While we support any reasonable measures to address deliberate wrongdoing or fraud, we are yet to be convinced that a compelling case has been made for the proposed changes where tax agents are involved in deliberate wrongdoing. The three particular proposals that are causing us concern include:
· easier access to a tax agent’s working papers
· new penalties
· possible ‘naming and shaming’.
We think that HMRC could and should endeavour to use existing powers to tackle fraudulent behaviour by tax agents more effectively rather than seek new powers.
Any proposed measures must be clearly targeted at fraudulent behaviour and not at honest agents who may have simply made an error. In view of the sensitivity of many of the proposals in this consultation, it is vital that they are not rushed through and that sufficient time is given to ensure that any changes have the support of the tax profession.
Our key concerns with the proposals, in more detail, are:
Access to working papers
This is a very serious sanction and an agent must be given a fair hearing. The agent must be provided with notice of any such proceedings and have the ability to mount a defence in front of any tribunal and/or court. The proposals as set out in the consultation need considerable further thought.
The draft legislation which was published on 8 February 2010 in respect of access to working papers and penalties proposals merely confirmed the concerns. We will be responding separately to the draft legislation shortly.
Tax geared penalties
We do not think that a tax-geared penalty would necessarily be an appropriate or proportionate response unless an agent has personally benefited from the deliberate wrongdoing.