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Policy Issues : Tax

Tax appeal reform

71. Work continues on drawing up detailed proposals for reforming the tax appeals system, with a view to introducing legislation when Parliamentary time allows. Our Chairman sits on the Tax Appeal Modernisation Project Board set up by the Department for Constitutional Affairs. Lord Justice Carnwath, the Senior President designate of Tribunals, has established a Tax Appeal Modernisation Stakeholder Group under the chairmanship of His Honour Stephen Oliver QC, President of the VAT & Duties Tribunal, Presiding Special Commissioner, and Chairman of the Section 703 Tribunal. The group feeds in recommendations to the Project Board. One of our members, Judith Edwards, is a member of the group.

72. In May 2005 we responded to a consultation on proposals to reform Section 703 Tribunal appeal routes. The Section 703 Tribunal has a very specialised jurisdiction. It deals with cases relating to certain provisions of the Income and Corporation Taxes Act 1988 involving the cancellation of a tax advantage arising from certain transactions in securities. It has been in existence since 1960. The aim of the proposals was to reform Section 703 appeal routes in line with the wider plans for administrative justice reform outlined in the 2004 White Paper. Views were sought on how the current related jurisdictions of the Tribunal and the Special Commissioners in this area of tax law could best be accommodated in a unified tax jurisdiction within the new tribunal structure proposed in the White Paper.

73. We welcomed the proposals set out in the consultation paper. We noted the commercial reality behind many Section 703 cases and suggested that the reforms could go even further, to include fast track and proportionate dispute resolution mechanisms in line with the general thinking underlying the White Paper. As regards the composition of appeal panels dealing with Section 703 cases, we considered that it was important to have some expertise drawn from the wider business community.

74. The reform of the tax appeals system, which we strongly support, has now been on the Government's agenda for a long time, and it is disappointing that so far a legislative slot has not been found. We very much hope that one will be found in the reasonably near future.