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HMRC should use criminal powers to tackle dishonesty, says CIOT

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The Chartered Institute of Taxation has commended HMRC’s ‘willingness to listen’ to criticisms of the department’s original proposals to tackle dishonest conduct by tax agents.

A new emphasis on ‘dishonest conduct’ instead of ‘deliberate wrongdoing’ was right, the CIOT said in response to the consultation document Working with tax agents: dishonest conduct.

But the tax body questioned the need for new powers: ‘If there is proven dishonesty, then it seems to us that HMRC should use their criminal powers.’

HMRC’s suggestion that prosecuting all cases suitable for criminal investigation could ‘unbalance HMRC’s criminal investigation coverage’ seemed bizarre, the CIOT said.

‘If that means that HMRC have insufficient resources to prosecute those who are attempting to defraud the tax system then that is surely a major issue to remedy.’

The CIOT said it supported HMRC action against those guilty of dishonest conduct but civil action ‘leads to a “balance of probabilities” judgement on actions that could effectively remove a practitioner’s livelihood.’

The consultations Working with tax agents: dishonest conduct and Establishing the future relationship between the tax agent community and HMRC close on 16 September.