CIoT Unhappy With New UK Law

by Robert Lee, Tax-News.com, London

09 October 2001

The Chartered Institute of Taxation (CIoT) has criticised the UK's new Proceeds of Crime Bill saying that it will lead to more tax errors which taxpayers will not admit to for fear of prosecution. Under the new Bill police will be granted the authority to monitor bank account transactions where monies are suspected of being used to finance terrorist operations.

The CIoT explained that many people will, rightly or wrongly, think twice before 'confessing' their tax errors if the Bill becomes law. This is because their advisers may in future be obliged to blow the whistle by informing the National Criminal Intelligence Service (NCIS) - an organisation staffed by police officers - instead of the Inland Revenue. The CIoT believes this will increase the chances that people making tax errors will be prosecuted and that fewer people will admit to routine errors in the first place.

'We fully support the intentions of the Bill to counter terrorists and drug cartels from profiting from money laundering,' added David Williams, chairman of the CIoT's tax policy sub-committee. 'However, the Bill should allow professionals to use the existing channels to inform the Inland Revenue of tax infringements without triggering a full criminal investigation. If the Bill goes through as it is, our tax system could undergo a huge cultural change in the direction of confrontation, and tax inspectors will be seen as police officers. Potentially it could be disastrous for the way the system works.'

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