The Chartered Institute of Taxation (CIOT) has claimed the proposed extension of the time limits available to HMRC to assess potential cases of tax errors or accidental avoidance regarding offshore matters is disproportionate. Announced in the Budget last November, the measure will see the assessment time limit extended to at least 12 years, compared with the present four years for mistakes and six for accidental non-compliance.
While backing efforts to tackle tax avoidance, the CIOT believes the case for extending the limits has not been made because HMRC now has more resources than ever to deal with the issue. It is also concerned that for many who have taken every care with their tax affairs, there will be a long wait to be sure that their bills have been finally settled.
CIOT Tax Policy Director John Cullinane said, "One suggestion we are making is that the extended time limits should only be applied to offshore matters involving ‘high risk’ jurisdictions which attract a Category 3 territory classification; that is those that have not agreed to share any tax information with HMRC. This seems a more proportionate approach."