In regard to the firm stance being taken by HMRC in the courts that taxpayers are not entitled (and should not expect) to rely on Statements of Practice, and in particular that HMRC would never publish a practice that is outside the law, it is interesting to read their recent press release concerning extra-statutory concessions – which are, of course, both outside the law and expected to be relied upon.
HMRC will issue draft legislation to give effect to a number of concessions and will seek technical consultation on the draft legislation to assist them in ensuring that the legislation will maintain the purposes and effects of the existing concessions. They will review all the concessions, although they think that most of them will be able to continue in their existing form, being within the scope of HMRC’s administrative discretion.
The House of Lords, in the case of Wilkinson , UKHL 30, indicated that extra-statutory concessions cannot go beyond the mere management of the efficient collection of the public revenue. The discretion in Section 1, Taxes Management Act 1970, enables HMRC to formulate the policy for dealing pragmatically with minor or transitory anomalies, cases of hardship at the margins or cases in which a statutory rule is difficult to formulate or its enactment would take up a disproportionate amount of parliamentary time. (I love that. Why is it so difficult to formulate statutory rules to provide taxpayers with relief? They never have a problem formulating rules to impose a charge.)
All the concessions are being considered and will either be retained as falling within the permitted discretion or will become the subject of specific legislative change; some may be withdrawn. The period of consultation ends on 26 January and the effects will no doubt emerge in the Finance Bill 2009.