Weekly tax brief - 19 January 2016

In this edition of RSM’s weekly round-up of the most important tax news, we cover the latest developments…

Is HMRC trying to circumvent legal time limits for tax enquiries

19 January 2016

A fundamental principle of the tax system is that taxpayers are entitled to certainty over finality in their annual tax affairs. Legally, HMRC has a strict time limit, known as the ‘enquiry window’ to raise questions about a submitted tax return. That time limit is 12 months from the date the return is received by HMRC. However, we are now seeing examples of HMRC indulging in what appears to be a backdoor attempt to extend the legal time limit beyond that set out by Parliament – a very concerning development which could leave taxpayers at the mercy of HMRC without adequate safeguards.

Answers on a postcard please

19 January 2016

The proposal by Republican presidential candidate Ted Cruz to abolish the IRS and replace the citizen’s tax return with a single postcard has resonances with current thinking about tax compliance in the UK. Some further clarity on the government’s digital strategy is urgently needed, but will this be in time for next week’s Parliamentary debate?

Report on HMRC's charter finds room for improvement

19 January 2016

The latest annual report on HMRC’s charter shows that the Revenue still has a long way to go to deliver on its customer service commitments.

Herbal tea case brews up trouble for HMRC

19 January 2016

A recent tribunal case involving a VAT refund on herbal tea highlights why it should never be assumed that HMRC is always right.