It looks like you might soon have to pay HMRC if you want to appeal against a decision they’ve made, and the threat is causing ructions in the law and accountancy sectors.
The government is proposing to charge individuals who appeal decisions made by HM Revenue & Customs. At the same time the Law Society is up in arms, warning that our leaders’ latest proposals to reduce costs in the judicial system are wholly bad. On one hand they will undermine access to independent rulings, on the other they’ll make an already overly-powerful entity – the tax office – far too powerful for its own good.
At the moment tax payers can go to a free first-tier tribunal to challenge HMRC rulings. But a recent consultation by the Ministry of Justice is considering charging a fee of anywhere between £50 and £200 to refer a case to the first-tier tax tribunal. We’re looking at £200 – £1,000 for hearings, depending on how complicated they are, and the Upper Tribunal would come in at an initial £100 followed by a painful £2,000 for a hearing.
In the opinion of the Law Society the Government is selling justice, actually selling access to the nation’s courts. It’ll mean if you want to question the charges levied by one branch of the government, you have to pay another division of government to get an answer. And it’s starting to feel very heavy-handed indeed.
Draconian extra HMRC powers against tax evasion
At the same time the government has given HMRC even more new powers to help it meet tax evasion prosecution targets. The very fact that they have ‘prosecution targets’ at all is disturbing, but things are about to get a lot worse.
The Summer Budget saw the Treasury pledging £750m to HMRC, which the revenue will use to ‘pursue offshore trusts’ and triple the number of evaders targeted by the tax man. They reckon the investmenbt will bring in an extra £7.2bn in tax revenue. But others are calling the new powers a tsunami, reporting that they include nasties like strict liability, where it’s no defence to claim evasion was accidental unless you have an extremely ‘reasonable’ excuse.
HMRC will also be able to bring a new kind of charge against businesses and individuals who help their clients to evade tax, as well as the evaders themselves.
The net is tightening, making it even more difficult to evade your taxes, which has to be a good thing. But the way in which it’s being done is making many people very nervous indeed. What about you? How do you feel about HMRC being given so many extra powers, and charging people to appeal?