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Quis Custodiet Ipsos Custodes?
The new appeals procedure, which covers all taxes, is now in force. For direct taxes the old appeals to the General or Special Commissioners have been replaced by a more formal appeal to the Lower Tier Tribunal.
However, as part of the process, there is another new innovation to consider. It is now possible to ask HMRC to carry out an internal review of a decision, assessment or determination as a prelude to referring the matter to the tribunal. This, of course, does beg the question in the title – “Who Watches the Watchers?
The answer of course is that they watch themselves (nothing much has changed since Roman times). The review will be carried out by another officer of HMRC but there are some safeguards.
The review will be carried out by a senior officer in the business area but he/she will be outside the line management of the “caseworker” who is handling the matter. This HMRC say will “ensure independence and objectivity” (although it may be prudent to keep a pinch of salt handy). The reviewer can uphold, vary or withdraw decisions.
The review must be concluded within 45 days, unless in a complex case a different timescale has been agreed and the conclusion will be conveyed in writing. This conclusion will be the position HMRC will take at a subsequent tribunal hearing.
So will all this work? Well it should certainly help to deal with decisions which have no strong technical merit but where the Inspector’s attitudes have become entrenched. On the other hand it is probably fair to say that a reviewer who always overturns the caseworker’s decisions will not last too long in the job. At best it will help to settle some cases without the need for a costly appeal and since all the lower tier cases will be reported, HMRC may wish to avoid the prospect of losing certain cases on appeal.
In general the procedure can do no harm and at least it is another opportunity to have a second opinion, albeit not entirely independent.
Certainly however, HMRC “customers” and their advisers will need to become acquainted with the idea and while it beds in we’ll all be keeping an eye on the watchers.
