It seems that HMRC are proposing a significant watering down of ESC A19.
Oh, and rather gemusingly, HMRC now refer to us as "taxpayers"!
Here are a few extracts of the document, re the removal of "exceptional circumstances" it appears that HMRC are relying on the continuous cycle of year end processing giving rise to "fewer instances" of "exceptional circumstances" and the build up of arrears:
"Extra-statutory Concessions ("ESCs") have been a feature of the UK's tax system for over 40 years. An ESC is a relaxation which provides taxpayers with a reduction in tax liability which they would not be allowed under the strict letter of the law...Issue date of consultation: 3 July 2012
ESC A19 sets out how HMRC may exercise its discretion not to collect income and capital gains tax which is lawfully payable, due to HMRC's delay in acting on relevant information in prescribed circumstances. This includes where the taxpayer identifies that HMRC did not properly deal with information received and the HMRC delay is the cause of an underpayment. HMRC is keen to ensure that this concession continues to apply in appropriate cases and that taxpayers understand it...
The proposed revised version of ESC A19 removes reference to 'reasonable belief' and introduces the idea of 'taxpayer responsibilities'. HMRC has introduced a set of responsibilities which HMRC considers to be a more objective measure to decide whether HMRC should not pursue the tax owed. HMRC expects taxpayers to have a certain basic level of knowledge about their own tax affairs and a set of responsibilities allows HMRC to objectively assess the taxpayer's position....
The 'Exceptional Circumstances' section has been removed in the revised text. As HMRC’s End of Year Reconciliation process now works on a continuous cycle after the end of the tax year, HMRC considers that there will be fewer instances where exceptional circumstances under its present form will occur and arrears build up over two whole tax years..."
Date of response: 24 September 2012
Tax does have to be taxing.
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