CIOT warns of tax 'retrospection'

Date: 12th February 2010

The Chartered Institute of Taxation (CIOT) has voiced its concern about the "apparent increasing use of retrospections in the tax system".

John Whiting, tax policy director at the CIOT, said: "The use of retrospective legislation always concerns us greatly; we think it damages the key principle of certainty in the tax system that is so important to its reputation and is inherently unfair."

The comment comes ahead of amendments to the tax rules, following an announcement from the financial secretary to the treasury earlier this month.

Mr Whiting has called for a "clear statement" to set out when retrospection will be used.

"[This action] must not dislodge the principle that the taxpayer is taxed on the wording of the legislation in place at the time of their actions," he added.

"We are taxed on what legislation says, not what HMRC thinks it says. Of course the taxpayer would have to sustain their interpretation in the Courts."