§ Mr. Tim Smithasked the Chancellor of the Exchequer if he will publish in the Official Report the letter dated 25 April 1986 from the Inland Revenue to certain professional bodies concerning inquiries made by tax practitioners to the technical division of the Inland Revenue; if it was with his authority that this change of policy was made; why it was made; why it was not the subject of a press release; and if he will make a statement.
§ Mr. Norman LamontThe text of the letter of 25 April 1986 is printed as follows. Treasury Ministers were informed of the issue of this letter. It was sent to six professional bodies representing tax practitioners. No more widespread notification was considered necessary.
A practice had been growing of treating technical division at Somerset house as a free tax advisory service for tax practitioners. That is not its function and, with increasing pressures of work and a current shortage of experienced inspectors of taxes, the Board of Inland Revenue could no longer continue to provide this service. The change does not mean that the Inland Revenue is no longer prepared to provide information to practitioners. The technical division will respond to inquiries about recent legislation and changes in Inland Revenue practice, and the normal point of contact for tax practitioners with the Inland Revenue will continue to be the tax office 412W responsible for dealing with the tax affairs of the practitioner's client. Notification of the Revenue's interpretation of tax law will continue to be provided by way of press releases and booklets and the Inland Revenue will ensure that inspectors in tax offices can provide an authoritative Revenue view in relation to questions arising in any particular case.
I am writing to let you know of some new guidance which, with considerable regret, we have found necessary to issue to our specialists in Technical Division, and to explain the background.As you know, our Technical Division at Head Office is responsible for advising Inspectors in Tax Districts on tax problems arising from their examination of accounts and tax returns, and for ensuring that the law is applied uniformly and consistently throughout the network; and it is also responsible for helping Policy Divisions prepare advice for Ministers and assisting with the preparation of new legislation. In addition, in recent years it has become increasingly involved with providing information or guidance to tax practitioners, who telephone or write direct to the specialists here. For our part, we have generally been happy to provide this help, where we can; and— though there are obviously some difficult areas—I think your members will agree that Technical Division staff have always tried to be helpful in responding to legitimate enquiries about difficult tax problems.I am afraid however that I have to tell you that against a background of continuing losses of experienced Inspectors from the Department, our Technical Division will, as regards enquiries from tax practitioners, in future he able to respond only to those involving recent legislation and changes in practice.Let me say again that I am sorry that it has become necessary for me to write to you, and to other professional bodies affected, in these terms. I thought, however, that those of your members who have found it helpful in the past to get in touch with Technical Division rather than the appropriate Tax District would at least like to be forewarned of this change, and be told why it has become necessary.