The Commissioners for Revenue and Customs Bill is set to enhance HM Revenues and Customs officers' powers but could lead to an abuse of power, as there is no check available within the legislation, according to The Institute of Chartered Accountants of Scotland.
Link: Concern over Revenue’s powers after merger
Under the new Bill, an HMRC officer who obtains information that is relevant to other areas of HMRC, is now permitted to pass on that information for an immediate or future follow up. ICAS, however, said that the legislation does not contain the appropriate safeguards.
In a statement it said that it would be ‘all too easy for an officer to dress up a belief that their question was relevant to the tax liability, enabling the officer to use the enhanced powers’. It added that there was no ‘obvious’ right of appeal that would enable the taxpayer to query the request via an independent body such as a tribunal or the commissioners themselves.
Derek Allen, ICAS’s director of tax, said: ‘To redress the balance, we recommend that a new right of appeal needs to be created and incorporated into the Bill to enable the taxpayer to question why an officer should come to a belief and whether it is reasonable.
‘Therefore an officer, formerly of Customs, who has visited the business with a view to checking the VAT return should not confront a taxpayer with a request to see the records relating to the income tax or corporation tax liabilities, especially as these will inevitably relate to a different time period.
‘Our aim is in the public interest to ensure that the new department has adequate powers to perform its job, while at the same time ensuring that the public has the protection of an independent review given by a right of appeal.’
ICAS also highlights confidentiality as another area of concern.
