The role of Tax Assurance Commissioner was established in 2012, following criticisms by the National Audit Office (NAO) and the Public Accounts Committee (PAC). Allegations of 'sweetheart deals' made at that time were found by the NAO not to be substantiated, but some criticisms were made.
A sample of settlements was found by Sir Andrew Park to be reasonable, but recommendations resulted for improving the processes for reaching settlements, including amending HMRC’s Litigation and Settlement Strategy. HMRC also changed their governance arrangements. A Tax Assurance Commissioner and Tax Disputes Resolution Board (TDRB) were appointed to scrutinise settlements with taxpayers in sensitive cases and those with more than £100 million in tax under consideration.
In the course of civil tax disputes HMRC’s decisions are made within the governance framework explained in its published code of governance for resolving tax disputes. This provides assurance that HMRC treats taxpayers fairly and even-handedly – no matter what the size or complexity of the taxpayer or their affairs.
Where tax disputes do arise, the department aims to work collaboratively with taxpayers and their agents as the most cost-effective way to agree the amount of tax due under the law. The vast majority of tax disputes HMRC has with customers are resolved by agreement, following discussions between ourselves and the taxpayer. However, where collaborative working indicates that there is no prospect of settling by agreement tax disputes move towards litigation.
In terms of the governance of HMRC’s largest and most sensitive cases this year, there has been a steady flow of cases to the Tax Disputes Resolution Board (TDRB) and Commissioners, informed by advice from technical specialists and specialist advisory boards including the Transfer Pricing Board and the new Diverted Profits Board.
There have been more cases referred to the business-level case boards which consider the next tier of significant and sensitive cases. This is largely due to the closure of settlement opportunities in 2015-16, which encouraged taxpayers to approach HMRC with settlement proposals before the opportunities were withdrawn.
Where taxpayers disagree with an appealable decision that HMRC has made they can ask for the decision to be reviewed or make an appeal to an independent tax tribunal, or take both actions. Chapter 4 provides further information about statutory reviews and appeals.
Following organisational changes within HMRC, Jim Harra CB has today been appointed as HMRC’s Tax Assurance Commissioner. Jim takes over from Edward Troup who is relinquishing the tax assurance role now that he is Executive Chair with wider responsibility for HMRC.
With his wealth of tax expertise and experience, Jim is well placed to oversee the assurance and dispute governance arrangements that allow Parliament and the public to be confident that HMRC secures the right tax under the law when resolving tax disputes. Jim does not directly engage with taxpayers to discuss their specific tax liabilities, nor is he responsible for the HMRC operational units that manage taxpayers’ compliance.
The tax assurance role was one of the changes introduced in 2012 to strengthen HMRC’s governance and assurance of tax disputes.
