Friday, September 26, 2008

"Reasonableness" and HMRC powers

I attended a joint ARC/CIOT event at the Treasury last night. This included a debate about HMRC powers in the context of the new compliance checks.

One of the speakers was Richard Davey from the HMRC, Powers and Safeguards Team. He coped well with a number of pretty challenging questions from the audience. One point in particular though stood out for me.

In the context of the extent of HMRC powers Richard said that their "VAT powers have been massively reined in". When asked for an example he stated that the 'reasonableness' requirement now introduced "represents a massive sea change".

If that's true then it's tantamount to an admission that in the past HMRC officers were exercising their powers 'unreasonably'. Indeed that they have carte blanche to continue doing so until they are first required to be 'reasonable' on 1 April 2009. Seems quite an apposite date!

The alternative view is that there is already an implicit obligation to exercise powers reasonably - in which case how much of a change is this and are there better examples (any examples) of how HMRC's new powers constitute a reining in of those currently available?

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