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Fair enough?

KEITH M GORDON scrutinises the proposed legislation designed to codify the current equitable liability practice

KEY POINTS

  • Equitable liability to codified by statutory instrument.
  • Conditions for the relief to apply.
  • Should the relief be a ‘once in a lifetime’ relief?
  • The relief should apply to all taxes administered by HMRC.

As was widely reported in the pages of Taxation last year the previous Government announced its intention to withdraw the practice known as equitable liability with effect from April 2010.

The practice is generally seen as a remedy of last resort for taxpayers who have amassed tax bills that exceed their true liabilities but which cannot be displaced because appeal time limits have expired.

When invoked the practice allows taxpayers to pay the right amount of tax based upon their actual income etc rather than that payable under the finalised determinations and/or assessments.

The stated rationale of the...

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