Her Majesty's Revenue & Customs (HMRC) have been warned by accountants, advisors and tax practitioners that they must practice what they preach when settling tax disputes.
HMRC have recently revised their litigation and settlement strategy guidance (15 July) and it contains assurances that it will "handle disputes non-confrontationally and by working collaboratively with the customer whenever possible". The strategy also says: "This will not deter HMRC from pursuing litigation or other approaches if collaboration is not working".
Permanent Secretary for tax, Dave Hartnett has said that HMRC will not concern itself with "package deals" during disputes nor will they go in for points scoring OR points trading. HMRC also say that they have no intention of entering into any settlements that result in them receiving less than the tax and penalties known to be due in what are considered to be "all or nothing cases".
While avoiding disputes is an HMRC and taxpayer priority, some professional advisors are sceptical. Head of tax investigations at RSM Tenon is Gary Ashford. He is of the view that HMRC may fail to see that "collaboration is a two-way process". Mr Ashford also said HMRC is emphasising that it will not do 50-50 deals". He also said that "But there is scope in life to meet somewhere in the middle. I can understand why it does want to end up in the 50-50 situation but it can be a pragmatic approach. The proof is in the pudding. If HMRC starts an inquiry, from the initial contact it must be an open and collaborative approach. This strategy can be used for that".
At St Matthew e-Accounting we will continue to monitor all legislative and process changes made by this and other UK government departments. In the meantime whether you are a local, national or international entrepreneur we are waiting to hear from you. For more information please go www.stmworldwide.com