CIOT criticises draft finance bill

News Article - 11 April 2007
Category:

Plans to penalise taxpayers for possible rule transgressions have been criticised by the Chartered Institute of Taxation (CIOT).

The 2007 draft finance bill outlines legislation that can allow HM Revenue and Customs (HMRC) to impose penalties on taxpayers if it thinks that they have done something wrong, or have failed to carry out a certain task.

CIOT president John Cullinane claimed that the legislation reflects a "sentence first, verdict afterwards" stance, as it does not take into account whether the taxpayer has actually committed an offence.

"We believe that in the proposed legislation the words 'HMRC think that' are superfluous. The words come from legislation where the inspector is exercising judgement. In the case of penalties, that is not the position," he stated.

The new bill was published on March 29th this year. Other regulatory impact assessments included in the bill encompassed managed service companies and criminal investigation powers.

Article keywords: Three MPs have tabled an early day motion (EDM) in parliament calling for a new regime that will provide small businesses with a legal entity to lobby for their rights.<br/><br/>According to Labour MP David Drew, Tory Peter Bottomley and Bob Spink, small and medium-sized enterprises (SMEs) in Britain need a &quot; suitable legal entity designed for use in the 21st century&quot;.<br/><br/>The EDC, entitled Income shifting and the future of small business taxation, calls for a review by HM Treasury of the ways in which smaller firms could be provided with a legal entity.<br/><br/>Chancellor Alistair Darling announced that small business taxation would be examined further and ways of simplifying current rules would be examined.<br/><br/>He also outlined proposals to reduce the amount of red tape that government departments can impose on small businesses in order to reduce the burden of regulation on SMEs.<br/><br/>Some leading accountants have suggested that efforts are being made to simplify the tax system for small firms and predict that a new legal entity could confuse matters rather than improve them, <a href="http://www.access-accounts.com/" target="_self">Accounting</a> Web reports.<br/><br/>However, others have welcomed an attempt to provide small businesses with the right <a href="http://www.access-accounts.com/" target="_self">accounting</a> and taxation systems for contemporary Britain. The current system of limited companies has been in place since the 19th century.<br/><br/>The EDC also advises that legislation on income shifting within small limited companies should be deferred.<br/><br/><a href="http://www.access-accounts.com/products.aspx" target="_self">SME <a href="http://www.access-accounts.com/" target="_self">accounting software</a></a> can help smaller firms to meet their <a href="http://www.access-accounts.com/business-software/dimensions-reporting-services.aspx" target="_self">management reporting</a> and taxation requirements.

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »