The Law Society has released a position paper expressing its belief that, in recent years, there has been a tendency on the part of government to allow the rule of law in taxation to risk being eroded in the interests of making the executive more effective, and makes a number of proposals as to how the government can mitigate this. The Law Society is ‘fully supportive of the government’s objective to discourage avoidance and change the economic incentives associated with tax avoidance but is keen to ensure that opinion is not obtained by measures that erode the rule of law’.
‘The tax and rule of law position paper is critical of government when enacting tax law such as: the use of retrospective taxation, which is a clear example of a breach of the rule of law; the deliberate uncertainty created by the general anti-avoidance rule (GAAR), as the rule of law conversely implies as much certainty as possible as to what legal obligations are; and the promulgation of new rules which seek to exclude or limit access to the courts’, it said in a statement. Some of the proposals included in the paper are:
the protocol on unscheduled announcements of changes in tax law should be amended to set out the ‘wholly exceptional’ circumstances in which legislation that takes effect before the date of announcement might be regarded as acceptable;
the protocol on unscheduled announcements of changes in tax law should be given greater force;
the adoption of a new tax law charter, which should set out the rule of law principles to which all tax legislation should adhere and include the right of access to the courts for a taxpayer;
the government and/or HMRC ought to be required to publish the reasoning as to how the relevant minister has certified that the Finance Bill or any other fiscal measure is compatible with the European Convention on Human Rights;
the proposals to allow HMRC to recover tax debts directly from bank accounts and to introduce a strict liability criminal offence for failing to declare offshore income should only be legislated if the legislation itself contains safeguards appropriate to the consequences for the taxpayer concerned;
the five-stage consultation approach to tax policy making should be placed on a more formal, perhaps even a statutory, footing; and
the establishment of an independent panel of advisers – consisting of ‘independent-minded tax professionals and academics, perhaps acting on a voluntary basis’ – which should be charged with advising the Treasury Select Committee on any proposed tax legislation.
The Law Society has released a position paper expressing its belief that, in recent years, there has been a tendency on the part of government to allow the rule of law in taxation to risk being eroded in the interests of making the executive more effective, and makes a number of proposals as to how the government can mitigate this. The Law Society is ‘fully supportive of the government’s objective to discourage avoidance and change the economic incentives associated with tax avoidance but is keen to ensure that opinion is not obtained by measures that erode the rule of law’.
‘The tax and rule of law position paper is critical of government when enacting tax law such as: the use of retrospective taxation, which is a clear example of a breach of the rule of law; the deliberate uncertainty created by the general anti-avoidance rule (GAAR), as the rule of law conversely implies as much certainty as possible as to what legal obligations are; and the promulgation of new rules which seek to exclude or limit access to the courts’, it said in a statement. Some of the proposals included in the paper are:
the protocol on unscheduled announcements of changes in tax law should be amended to set out the ‘wholly exceptional’ circumstances in which legislation that takes effect before the date of announcement might be regarded as acceptable;
the protocol on unscheduled announcements of changes in tax law should be given greater force;
the adoption of a new tax law charter, which should set out the rule of law principles to which all tax legislation should adhere and include the right of access to the courts for a taxpayer;
the government and/or HMRC ought to be required to publish the reasoning as to how the relevant minister has certified that the Finance Bill or any other fiscal measure is compatible with the European Convention on Human Rights;
the proposals to allow HMRC to recover tax debts directly from bank accounts and to introduce a strict liability criminal offence for failing to declare offshore income should only be legislated if the legislation itself contains safeguards appropriate to the consequences for the taxpayer concerned;
the five-stage consultation approach to tax policy making should be placed on a more formal, perhaps even a statutory, footing; and
the establishment of an independent panel of advisers – consisting of ‘independent-minded tax professionals and academics, perhaps acting on a voluntary basis’ – which should be charged with advising the Treasury Select Committee on any proposed tax legislation.
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