Institute calls on Revenue to abandon 'intimidating' letters to taxpayers

A pilot project supposed to ease the burden on thousands of taxpayers who file inaccurate tax returns should be suspended because it is intimidating and confusing, a leading body of taxation advisers said yesterday.

The Chartered Institute of Taxation said HM Revenue & Customs had failed to make it clear whether the project was compulsory for taxpayers, whether their statutory rights were affected and how they should respond to requests for more information or increased payment demands.

The Revenue launched the pilot study early in July, in an attempt to target taxpayers who have made mistakes calculating how much tax they owe, rather than deliberately tried to evade tax. Such taxpayers will in future be sent "intervention" letters, asking them to provide more information about their income, rather than notices that the Revenue plans to launch full-scale investigations of their finances.

However, John Cullinane, the CIOT's president, said: "While we welcome the principle of looking at more flexible forms of dealing with taxpayers on compliance issues and the approach of piloting proposed approaches, we do have many and significant concerns with the approach taken with these letters."

Mr Cullinane said the intervention letters took a tone "no less threatening" than investigation notices, but failed to properly explain taxpayers' rights and responsibilities.