Giving certainty to business through clearances and advance agreements H.M. Treasury
Comments from ACCA
To HM Treasury
September 2007
We consider the four areas identified by Sir David Varney in his review of large business and HMRC are key to a better relationship and understanding between the two parties.
Introduction
In general terms we are highly supportive of the proposals contained in the consultation document. If the proposals can be adhered to with the resource requirements being met and undertakings are provided that the turnaround times envisaged can be met. In addition the communication mechanisms being put in place, so that clearance advise which is given can be shared with other tax payers is a vital part of what is planned.
Specific Points
- If the scheme is to work effectively we need to ensure that the ruling is received back within the 28 days as outlined in the paper
- HMRC should not reject requests for rulings by the taxpayer on the grounds of the request being frivolous. If the answer is meant to be so straight forward then it should only require a short response time copying something to the taxpayer from an HMRC document which already exists.
- We consider it to be essential that there is uniformity of response to taxpayers hence it will almost certainly require centralisation of the clearance mechanism to ensure this.
- We agree that the taxpayer should make full disclosure of all aspects of the transaction but do not consider it appropriate to submit any professional opinions which may have been obtained as these should be considered privileged.
- It appears that the idea is to roll out the clearance procedure to large businesses but it is in fact the smaller ones which will probably be more in need of such a system and they should also be catered for.
- The restriction to only the last four Finance Acts is not welcome. Surely if the answer is tried and tested then it should take only a small amount of resources to respond.
- In a dynamic economy where businesses are starting and ceasing all the time such artificial restrictions as the number of Finance Acts or whether a question was frivolous should be left to the tax payer. Questions which were already answered would only require a quick link to that answer being sent back to the taxpayer.