Appendix 4: Call for evidence
The House of Lords Economic Affairs Committee’s Finance Bill Sub-Committee, chaired by Lord Forsyth of Drumlean, is investigating the draft Finance Bill 2018. In particular, the Sub-Committee will examine developments in the balance of powers and safeguards between Her Majesty’s Revenue and Customs and the taxpayer. The Sub-Committee will also examine progress on the ‘Making Tax Digital’ programme since the Sub-Committee’s March 2017 Report on Making Tax Digital for Business.
The Finance Bill Sub-Committee is appointed annually by the Economic Affairs Committee to consider the draft Finance Bill (though it does not always choose to conduct an inquiry). The Sub-Committee focuses on issues of tax administration, clarification and simplification rather than on rates or incidence of tax.
Evidence sought
The Sub-Committee is seeking evidence to address the following questions:
HMRC powers
- What principles should underlie the design of HMRC powers, and where should the balance be struck between taxpayer and tax authority?
- What principles should govern the development of HMRC powers in a globalised digital information age?
- To what extent, or in what areas, is the existing balance of powers between HMRC and the taxpayer inappropriate or unfair?
- The Sub-Committee would be interested in examples of perceived unfairness, either in areas of policy or instances of enforcement.
- How should HMRC powers be differentiated to reflect the different problems being tackled e.g. careless error, sophisticated tax avoidance, and deliberate tax evasion?
- How are HMRC’s powers operating in practice? Are they being used in line with their original policy intent?
- Is there sufficient oversight of HMRC powers, and safeguards against their abuse or misuse? Does the oversight and governance of the powers need to be improved? If so, how?
- What is the right balance of powers and safeguards in the security deposit regime and the assessment of offshore matters, for which amendments are proposed in clauses 33–35 of the draft Finance Bill?
Making Tax Digital for VAT
- What key improvements have occurred, or new concerns have arisen, since the Sub-Committee’s report on Making Tax Digital for Business was published in March 2017?
- How prepared are HMRC, businesses (small and large) and software providers for the implementation of Making Tax Digital for VAT in April 2019, and what are the challenges of concurrent preparations for Brexit?
- The Sub-Committee would be interested in hearing about the experiences of individual businesses preparing for implementation, as well as more holistic responses.
- What are the potential costs of Making Tax Digital for VAT for businesses?
- Businesses involved in the pilot programmes are encouraged to contribute their experiences.
- How could the penalty regime and the new VAT interest regime proposed in the draft Finance Bill be improved or simplified?
What are the implications of having different penalty regimes for different taxes?