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HMRC are planning to revise extra-statutory concession (ESC) A19.
The department has launched a consultation on a revamp of the concession, which can be used by taxpayers to have outstanding tax written off when it is possible to show the Revenue failed to use information in its possession in a timely manner.
HMRC’s most significant aim is to introduce the concept of 'taxpayer responsibilities' in respect of claims against the recovery of underpaid income tax in line with the taxman’s charter.
The altered ESC A19 removes reference to ‘reasonable belief’ and introduces the expectation that taxpayers have a basic level of knowledge about their own tax affairs.
The suggestion of a time limit on the use of the concession is mooted on the basis taxpayers should show an interest in their affairs and take personal responsibility to ensure they are correct.
If an amount is disputed and the taxpayer believes HMRC caused the error, the department should be approached as soon as possible.
Revisions also include the removal of reference to capital gains tax on the basis the requirement for individuals to self-assess for capital gains makes the concession redundant.
The consultation closes on 24 September; comments should sent by email.
‘One good thing about the new wording is that HMRC clearly accept that the provision of a P14 amounts to sufficient notification to the department of an individual's employment income and the tax deducted there from,’ said Keith Gordon, tax barrister with Atlas Chambers.
‘The recent controversies concerning the application of ESC A19 stem mainly from arguments that HMRC were not obliged to take into account such information,’ he added.
‘If indeed it is appropriate to revise ESC A19, then surely it would be sensible for it to be put on a firm statutory footing, with a freestanding right of appeal to the Tax Chamber. This will allow the taxpayer's reasonable belief – or conduct – to be ruled upon by an independent judge and not by HMRC itself’.
