Derek Allen ICAS
Mary Fraser ACCA
Jim Greenwood AAT
Elaine Gibson IPP
Andrew Tall ICAEW
Tina Riches CIOT
Gary Ashford CIOT
Mike Arnold CIOT
Paul Hill ATT
Simon Sweetman FSB
Robert Maas IIT
Keir Anderson ABI (Association of British Insurers)
Kelly Hayworth LITRG (Low Incomes Tax Reform Group)
Stephen Banyard BCU
Simon Woodside BCU
Mark Young BCU
Linda Whewell RIS
Pete Robson RIS
Michael O’Callaghan Central Compliance
Mark Leech Central Compliance
Naomi Ferguson Local Compliance
Alison Weir Local Compliance
Caroline D’Cruz Compliance Pacesetter
Jane Cooper HMRC Enforcement & Compliance Communications
James Pretty HMRC BCU
1.1 HMRC apologised for the recent data losses, explained what activities were in progress to minimise the impact and recognised that it would take a lot more work to repair the damage to the organisation’s reputation. Agent representatives expressed the general concern of the industry and were awaiting the outcomes of the various reviews that were underway.
1.2 The background to the new compliance checks was set out, including industry calls for lighter touch interventions as an alternative to Section 9(A) enquiries, lessons learned by HMRC from the initial pilot exercises, CRF work to develop a framework of Principles & Safeguards, and the recent 'Taxation' article about VAT letters to haulage companies. Based on the lessons learned from this process, HMRC had developed a draft 'Ways of Working' document setting out how it would work with CRF members on these areas in future.
2.1 Meeting Paper 2, 'Draft Ways of Working', was introduced. The key features being that HMRC and agent representatives would apply the Framework of Principles and Safeguards (once agreed), share forward working plans on a rolling basis, and establish mechanisms for communicating key issues and concerns to each other on an ongoing basis.
2.2 The draft document was welcomed by agent representatives and the importance of getting processes right at the 'big picture' level was emphasised. The different levels of engagement were thought to be about right and it was recognised that the CRF group would provide guidance and allow HMRC to apply it via internal processes. It would not be possible, or desirable, for HMRC to consult agent representatives in detail on every product or letter but forewarning of upcoming work plans was welcomed and would be used to help determine which areas the CRF should look at in more detail.
2.3 Meeting Paper 3 'Draft Terms of Reference' was introduced. Once adopted, the CRF would become a formal body within the Tax Agents and Advisers Steering Group structure, meeting at least three times a year; with draft agendas, key issues and meeting notes published on the HMRC website. The exact relationship with WT Compliance Sub-Group (WT CSG) remained to be decided.
2.4 Agent representatives commented that they would like to see meeting length limited to 2 ½ hours, greater input to agenda setting (two way process), time limits for providing responses to issues raised through the issue register, separation of resolved issues from live issues, and a means of taking forward the long-term compliance culture work that the WT CSG had been working on.
3.1 Meeting Paper 4, the 'Framework of Principles and Safeguards' ('the Framework') was introduced. The original concept had emerged in response to the first new intervention pilots in 2006. The content was developed in the CRF compliance check workshops in May 2007. Draft versions were posted on Shared Workspace during the summer and resulting comments were incorporated.
3.2 The Framework would be applied to non-standard compliance checks, including the type of VAT letters that the 'Taxation' article referred to. The Framework would also be used to inform the key stages of HMRC campaign development, including campaign design, pilots, implementation phases, contacts with customers and evaluation.
3.3 Agent representatives were concerned that the 'informal reconsideration process' from the Framework was not mentioned in the consultation about tribunal reform and appeals. It was suggested that Tribunal Reform should be a specific agenda item for the next meeting.
3.4 Other suggestions included adding the 'reduction of burdens on taxpayers
and agents' to the design principles, bringing ABAB into the design process,
and making sure that second reviews were seen to be independent of initial
decisions (e.g. carrying out reviews within a different management chain).
3.5 A specific issue was raised in relation to the timing of Tribunal Reform
consultation work and pilot exercises. It was agreed that this should be dealt
with through explanatory letters to the CRF members and a more detailed discussion
at the next CRF meeting.
3.6 CRF members were asked to agree the framework and provide any further comments by Friday 14 December.
Sharing Risk Assessments and Future Work Plans
3.7 Meeting Paper 5 'Sharing Risk Principles' was introduced on the basis that this is a developing piece of work. HMRC would be grateful for comments on the content of this paper by 31 December in order to inform a policy decision on this matter early in 2008.
3.8 HMRC intended to share risks and work plans on the basis set out in the draft 'ways of working' paper (see para 2 above). The detailed plan for 2008/9 was still under development and would be shared with CRF at a later meeting.
3.9 HMRC thanked CRF for their contributions to the development of work plans for the property and bank interest projects. The plans and draft letters had been significantly improved as a result of this work and revised plans were summarised in the presentation. This work was scheduled to begin early in 2008 and it was agreed that HMRC would share the revised versions by email shortly after the meeting.
3.8 Agent representatives commented that they need more time and information to engage effectively with compliance developments that come about as a result of changes to policy and legislation. This was also an area that HMRC saw as most suitable for campaign working so there would be opportunities for consultation through the design, implementation and evaluation stages.
4.1 HMRC gave feedback from a meeting between fee protection insurance underwriters and a small number of agent representatives that took place at the Association of British Insurers London office in August. The meeting had considered the potential impacts of new compliance checks on fee protection insurance. The underwriters’ main concern was that the point at which HMRC started its activity should be easily identifiable. The features they would like to see are set out below:
4.2 The ABI representative was willing to act as a contact point for any further questions around this.
4.3 Brief updates were given about other ongoing work that falls within the CRF remit (Openness and early dialogue, email pilots and sharing workflow processes) but shortage of time curtailed discussion of these topics.
5.1 HMRC outlined plans to test how 'general' tax officers could be used to check risks in more than one regime at the same time. This approach would combine a set of activities that are currently carried out by different officers, often one-after-another, into a single, streamlined process. The aims of the project are to shorten the overall process, reduce disruption to business and provide earlier certainty to customers.
5.2 Agent representatives acknowledged that this was the right direction to be heading in and hoped that it could be used to reduce the compliance burden on businesses. There were questions about whether the turnover threshold that had been used to identify businesses for the pilot exercise was too low to provide a representative set of data to inform a national roll out.
5.3 There was also some discussion of the most appropriate training and team structures for General Tax Practitioner working. It was suggested that HMRC might look at how larger accounting firms train and organise their workforces (where staff generally specialise but are expected to have good general awareness of cross tax issues).
