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Column 555tax, capital gains tax, and certain aspects of class 4 national insurance contributions paid by the self-employed.
The bulk of their work is devoted to dealing with delay appeals. That may explain some of the complaints in the individual case that my right hon. Friend mentioned. the number of cases that must be dealt with on a particular day can be very high.
For those who do not appreciate it, a delay appeal is generally one in which the taxpayer--usually a trader or trading company--has lodged an appeal against an estimated tax assessment, but has taken no further step, by submitting his business accounts or other relevant information, to show that the assessment is incorrect in principle or excessive in amount. There must be few hon. Members with any business experience who have not experienced this procedure--at least through their accountants. The latest available information--and this shows the weight of work--reveals that 591,486 delay appeals were referred to the general commissioners in 1987, although most of these were subsequently determined by agreement with the inspector.
The Lord Chancellor regards it as important that the general commissioners should acquire and maintain experience and consistency in their determination of these appeals, and as a general rule, it is expected that each general commissioner will sit for a minimum of six sessions a year. The private affairs of taxpayers are recognised to be confidential and therefore a general commissioner on appointment is required to sign a form of declaration of secrecy before he can act. In general, three general commissioners are present at each sitting.
It is also important to note that general commissioners must act impartially, and section 5 of the Taxes Management Act 1970 provides that no general commissioner shall act as such in relation to any matter in which he has a personal interest, or is interested on behalf of another person, except with the express consent of the parties to the proceedings. The commissioners are instructed to seek advice if they are in any doubt about whether they have any connection with the proceedings that might be seen as bringing the commissioners' impartiality into question. They are also instructed that they should take particular care to treat appellants and representatives of the Inland Revenue in a like manner. That is important because it is not merely enough for justice to be done, it must be seen to be done.
Mr. Michael Marshall : I entirely accept what my hon. and learned Friend the Solicitor-General has said. Does he agree that this gives even greater force to a point which, in the interests of time, I omitted--the Council on Tribunals' recommendation that Inland Revenue officers concerned with cases should come into cases at the same time as members of the public? The idea of coming in to see members of the Inland Revenue and the general tax commission sitting, as it were, at the top table, gives the wrong impression in terms of treating each even-handedly.
The Solicitor-General : There is force in what my hon. Friend says. Whether exactly the right way to deal with it is for the two parties to come in separately or whether the matter should be handled so that it is more like what, in some ways it is--a crowded court--I know from my own
Column 556experience that courts dealing with large numbers of matters in one morning always have large numbers of counsel. I appreciate that one of his constituent's concern was that he seemed to be in a room in which there were an awful lot of people with a precise purpose. It would have given a better impression if, at least, their respective functions had been clearly delineated. We shall look carefully at that matter and I shall pass on my hon. Friend's remarks. As part of the necessary background to an appreciation of the role of general commissioners, I draw attention to certain relevant provisions of the Taxes Management Act. First, in an appeal against an assessment, the initial burden of proof is normally--as hon. Members will realise--on the taxpayer, unlike most other cases, where the burden is on the prosecution or the plaintiff. Secondly, the decision of the general commissioners is normally final. However, if aspects of difficulty arise before the decision is reached, the matter may be referred--either at the request of the taxpayer or on the initiative of the commissioners--to the special commissioners. Once made, the decision of the general commissioners is final and conclusive unless the appeal is taken further by way of case stated or, in unusual circumstances, by judicial review. In this context it is understandable that, once the decision is taken, it would not be appropriate for a taxpayer to ask questions. It is important to stress that, in this particular case, there was plenty of opportunity to ask questions and present the case before the decision was reached.
Having sketched in outline the background to the general commissioners, let me now address some of the other points made by my hon. Friend. He emphasised the case for drawing up comprehensive rules of procedure for the commissioners. The Lord Chancellor and the Treasury are indeed considering carefully the proposals of the Council on Tribunals, but--as my hon. Friend would be the first not only to recognise but, I believe, to urge--a balance must be struck between the formality of procedures which, in other respects, are often criticised for being over-formal, and the need for a speedy, effective and common-sense process.
Treasury Ministers have decided to seek further views on that difficult question, and it would be unwise to form a concluded opinion until the results of the exercise have been received. Thorough consideration, however, will be given to the various advantages and disadvantages of moving away from the present relatively informal system to what would inevitably be a rather less flexible one. No doubt attention will be given to the fact that the vast majority of appellants are not represented by someone legally qualified.
My hon. Friend also stressed what he perceives as a lack of accountability on the part of the general commissioners. There is no doubt, however, that the commissioners play a responsible and invaluable part in dealing fairly and efficiently with a large number of appeals. The Council on Tribunals has joined my hon. Friend in paying tribute--in its recent annual report-- to the substantial amount of good work that the commissioners do.
If, however, my hon. Friend is concerned about the lack of a proper chain of command, I can make some observations. The general commissioners are lay people drawn from the community--this cannot be emphasised enough--and for the most part their duties involve a common-sense approach. Where there is an issue of law, a
Column 557Commissioner will rightly turn to his clerk for guidance and will act accordingly. If a mistake is made, the appellant has the right to take the case to the High Court by the case stated procedure. Let me put the matter into perspective. To the best of my knowledge such cases are few and far between. If the appellant is aggrieved at the method by which the Commissioners have reached a decision on the facts, it is open to him to consider seeking redress through judicial review. Should his complaint relate to the conduct of a commissioner--this was raised at one stage in the case in question--and if there appears to be a case to answer, the Lord Chancellor will require his advisory committee to investigate and make a report to him before deciding on the appropriate course of action.
My hon. Friend also had in mind the criticisms levelled at the general commissioners in the 1987-88 annual report by the Council on Tribunals. In particular, the council expressed disappointment that the Lord Chancellor had not accorded a higher priority to his Department's assuming overall control of the general commissioners. The Lord Chancellor, while recognising and accepting the case for his Department to take over full administrative responsibility, is engaged in a wide-ranging consideration of a number of his responsibilities, which need to be sensibly dovetailed. He wishes to reach a conclusion on how to deal with a number of matters in the legal and quasi-legal sphere, and he needs to balance the competing demands on resources before deciding on the order of priorities for action.
Let me counterbalance that by mentioning some of the other actions that have been taken. An association of general commissioners for the London area is well on its way to formation and it is hoped that other areas will join
Column 558in. Revised interim notes for the guidance of general commissioners have been prepared and issued in Northern Ireland. They will be issued in England and Wales in the near future. These notes stress the importance of not only being independent but being seen to be independent. They also stress the need to give an appellant full opportunity to put his case. A copy of these interim notes will be placed in the Library.
With the introduction of general commissioners in Northern Ireland, a training programme for them has been set up involving sitting in with a special commissioner, attendance at seminars, shadow meetings when cases have been put up for consideration and visits to meetings in this country. The Judicial Studies Board has been invited to consider training for general commissioners and will do so through its tribunals sub-committee when time allows. The Association of Clerks to Commissioners is to consider a code of good conduct for its members. The Lord Chancellor is also giving thought to other means whereby he can be satisfied that the independence of general commissioners is safe and apparent.
As my hon. Friend will have noted, I have not commented in great detail on the individual case that is the background to the debate, but I have dealt in some detail with the matters of general principle. With regard to the specific case, the Lord Chancellor was satisfied that there were insufficient grounds for him to intervene in the case. He has set out his reasons, however, in considerable detail in a private letter to my hon. Friend and, through him, to his constituent.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Ten o'clock.
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