LITRG press release: Low Incomes Tax Reform Group welcomes today’s report on HMRC’s powers

4 Feb 2021

LITRG welcomes today’s long-awaited publication of the Evaluation of HMRC’s implementation of powers, obligations and safeguards, which comes after a long period of constructive engagement with LITRG and other stakeholders.

LITRG has provided HMRC with feedback on the use of several powers in scope of the evaluation as well as the cross-cutting themes, as they affect low-income and unrepresented taxpayers.

Tom Henderson, LITRG Technical Officer, said:

“We were keen to highlight during the consultation process our concerns about taxpayers facing extreme penalties of up to 200 per cent of the unpaid tax where they have not corrected certain offshore tax non-compliance by 30 September 2018. We have seen cases involving undisclosed foreign pensions or small amounts of foreign bank interest – often where foreign tax is withheld at source and the taxpayer had no idea that the income was taxable in the UK or that they were required to disclose it by September 2018 to avoid these harsh penalties. We welcome HMRC’s commitments today to provide better guidance on the taxpayer safeguard of a reasonable excuse and to discuss further how to improve the experience of taxpayers who correct their tax through the Worldwide Disclosure Facility.

“However, today’s report is worth nothing on its own without a genuine and concerted effort by HMRC to act on their 21 new commitments. If HMRC can follow through on these, we are hopeful that it will represent a step towards a fairer and better balance between HMRC powers and taxpayer safeguards. Many of the commitments should especially benefit low-income and unrepresented taxpayers, such as those aimed at digitally excluded taxpayers, improving online guidance, improving taxpayer communications and supporting those in financial hardship. We look forward to deepening our engagement with HMRC on these issues to ensure that the commitments bear fruit.”

Notes for editors

1. Evaluation of HMRC’s implementation of powers, obligations and safeguards, 4 February 2021 – here.

2. Low Incomes Tax Reform Group

The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.