Once again—I am sounding like a broken record—I am happy to support the general principles of the clause.
Although this is not one of the more contentious Finance Bills, we are still required to scrutinise it. I want the Minister to address the concerns that have been raised with me and other members of the Committee by the Chartered Institute of Taxation. I accept that there has been consultation and that these points have been made, but in its submissions to me the institute raised concerns about the need for adequate safeguards in relation to the powers under the compliance checks. It is concerned that the safeguards provided are inadequate. I am not making a judgment on that, but it is important that the Minster should reflect on it and consider whether there is merit to those concerns.
The Chartered Institute of Taxation believes it would be helpful for there to be guidelines and advice to the officers who will deal with the implementation of the measure, and I would welcome the Minister’s reassurance about that. When officers use the powers that deal specifically with the exercise of subjective judgments, those powers should be reflected in published information about how and on what those judgments were made. The institute believes that the Treasury should accept recommendations to ensure that guidelines for officers are published and that when subjective and marginal decisions are taken, the officers themselves should be open to scrutiny.
The Chartered Institute of Taxation advises that HMRC will examine in detail the previous recommendations and release draft guidance to the officers who are going to implement the judgments before the powers come into effect. I raise the issue so that the Minister can reflect on it and consider whether she agrees that detailed guidance should be provided to officers about how they will be managed downstream, at the coal face of taxation issues. If she does not wish to follow that route, can she reassure those who take an interest in such matters that those concerns are unfounded?
Thank you, Mr Caton. It is a pleasure to serve under your chairmanship on this final day of the third Finance Bill of the year.
Clause 29 introduces schedule 13, which amends provisions covering excise compliance checks. HMRC has been reviewing powers and safeguards for checking compliance. Previous Finance Acts introduced a modernised and aligned checking framework, which now applies across HMRC’s other taxes and duties. Schedule 13 completes that work.
Excise is a specialised type of regime. The key risks are in the goods themselves, and therefore access to those goods is crucial. Excise fraud in alcohol, tobacco and oil is a major risk to the Exchequer, to legitimate businesses and to consumers. For that reason, the Government have taken a different approach to the powers and amended them rather than align excise within the framework that applies to other taxes.
As the right hon. Gentleman said, the proposals have been subject to two full formal consultations since July 2009, and draft legislation was published in January and again this summer. The responses received were broadly positive across all excise trade sectors, including those from the Association of Chartered Certified Accountants, the Chartered Institute of Taxation—I will come shortly to the points that it raised—the Institute of Indirect Taxation, the National Casino Industry Forum, the Scotch Whisky Association and the Tobacco Manufacturers Association. They all recognise the need in future to tackle the illicit market more strongly than we have been able to in the past.
The changes complete the work so far done on modernising compliance checks. They provide useful new powers that will ensure that HMRC can continue to be effective in tackling the fraud that pervades the excise arena. On the additional powers and the published guidance, I can assure the right hon. Gentleman that, as this measure introduces amendments to existing legislation, the current guidance will be updated to take account of the changes.
As was promised in the response document issued in March 2010, HMRC will be exposing the guidance for comment, which is in line with the approach to previous changes to compliance-checking powers. We will ensure that the guidance is updated, which will avoid the risk that the powers being changed by the clause might be misapplied.