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Economic Affairs Committee report on Finance Bill Published Date: 04/01/2021

The Economic Affairs Committee has published its report on Finance Bill including its findings on proposals for tax checks for licence renewal applications.

In relation to the tax checks for licence holders, the committee stated:

“On proposals for new tax checks for licence renewal applications, we are worried about a potential ‘mission creep’ in the proposals which risks them going beyond a simple check for tax registration, which was thought to be the original intention. If the introduction of the checks results in more traders becoming unlicensed so as to avoid them, this could pose risks to the public. We also note that ‘conditionality’ is an unproven principle: HMRC should thoroughly assess its effectiveness before extending this principle to other sectors.”

It also recommended to the Government that:

“Finally, there appears to be an increasing trend of HMRC outsourcing its compliance responsibilities—for example, in requiring licensing authorities to undertake tax checks. For any future outsourcing proposal, the Government must explain what the justification for it is, and why it cannot be done by HMRC.”