Daily Mail

Tax­man is too pow­er­ful, warn peers

- By Claire El­li­cott Po­lit­i­cal Cor­re­spon­dent Taxes · Society · Business · HM Revenue and Customs · Michael Forsyth, Baron Forsyth of Drumlean

HMRC is too pow­er­ful and is dev­as­tat­ing the lives of some on lower in­comes, peers have warned.

The bal­ance of power has tipped too far in the tax­man’s favour, a Lords re­port says, and should be bet­ter weighed against the need to curb tax avoid­ance.

The sys­tem has ‘some broad, dis­pro­por­tion­ate pow­ers with­out ef­fec­tive tax­payer safe­guards’, the Lords eco­nomic af­fairs com­mit­tee said. It sin­gled out as un­fair the pros­e­cu­tion of tax avoid­ance schemes used by some NHS staff and con­trac­tors, say­ing in many cases they were re­quired to do so by their em­ploy­ers.

It also pointed to clauses in the Fi­nance Bill which al­low HMRC to in­quire into off­shore ac­counts from 12 years ago, some­thing the com­mit­tee branded an ‘un­rea­son­able bur­den’. Com­mit­tee chair­man Lord Forsyth of Drum­lean said: ‘HMRC is right to tackle tax eva­sion and ag­gres­sive tax avoid­ance.

‘How­ever, a care­ful bal­ance must be struck be­tween clamp­ing down and treat­ing tax­pay­ers fairly.

‘Our ev­i­dence has con­vinced us that the bal­ance has tipped too far in favour of HMRC and against the fun­da­men­tal pro­tec­tions ev­ery tax­payer should ex­pect.’

HMRC’s ap­proach to prose­cut­ing those in­di­vid­u­als ret­ro­spec­tively is ‘dev­as­tat­ing the lives of mid­dle and lower in­come in­di­vid­u­als’, the re­port warns.

It calls for a Trea­sury re­view to con­sider es­tab­lish­ing an in­de­pen­dent body to scru­ti­nise HMRC, which is not ‘suf­fi­ciently ac­count­able’ to tax­pay­ers and should have its pow­ers re­duced to be more fair.

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