Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009

That the draft Order laid before the House on 26 November be approved. My Lords, I am moving this Motion on behalf of my noble friend Lord Myners. A draft of this order was laid before Parliament on 26 November 2008. The order takes a major step in the implementation of the reform of the tribunals that consider tax appeals, under the Tribunals, Courts and Enforcement Act 2007. This is also an important step in realising the benefits of the merger of the Inland Revenue and Customs and Excise into Her Majesty’s Revenue and Customs. Under the provisions of the Act, the existing tribunals concerned—in particular, the general commissioners, the special commissioners and the VAT and duties tribunals—are being brought together into a single, two-tier tribunal structure, which will be manifestly independent of Her Majesty’s Revenue and Customs. This means that, for the first time, all tax appeals will be dealt with by a single tax jurisdiction. Tribunal users should benefit from a more manifestly independent, consistent and coherent tribunals system, with improved quality of tribunal services and better supported judicial decision-making. At present, in addition to appeals on the different taxes being heard by different tribunals, there are different HMRC internal review and appeal processes, depending on the nature of the tax in dispute. This order takes the opportunity to bring greater consistency to these provisions across the great majority of HMRC business. Benefits include making Revenue and Customs dealings with taxpayers more open, improving quality and consistency in decision-making and encouraging dispute resolution between the parties to avoid the expense and anxiety of unnecessary hearings. The order is made under powers contained in the Act and in Section 124 of the Finance Act 2008 and comes into force on 1 April. It is subject to the affirmative procedure, both here and in the other place, where it was approved on 16 December. The order transfers the functions of the existing tax tribunals to the new tribunal, and transfers special commissioners and members of the VAT and duties and Section 706 and 704 tribunals to the new tribunal. It also makes a large number of consequential amendments to legislation relating to tax tribunals and the appeals that they consider. Noble Lords have had the opportunity to read Schedules 1 and 2 to this order. In particular, the order introduces a right to an optional statutory review of appealable decisions across the great majority of HMRC business. It also makes related administrative changes to the way in which appeals are handled. Finally, the order contains transitional provisions to allow a smooth transition to the new tribunal and review systems. These changes, in particular those concerned with providing a new statutory right to a review of a Revenue and Customs decision before an appeal reaches a tribunal, have been the subject of extensive consultation, which was very much in favour of the optional review system. A consultation document was issued with the 2007 Pre-Budget Report. After meetings with 20 representative bodies and other interested parties, it was followed up with a response document at the time of the 2008 Budget. Last June, HMRC published a draft of the main provisions made by this order, together with a supporting technical note. A response document on the comments received on those documents was published when this order was laid. We are most grateful to those who took time to respond—either in writing or at meetings—during this process, which has contributed significantly to improving the legislation before us. Noble Lords will notice that, at some 150 pages, this order is considerably longer than the draft published in June. The earlier draft focused, of course, on the main provisions in the direct and indirect taxes, the intention always being to complete the picture after consultation. The order before the House amends over 110 Acts and statutory instruments and revokes 22 further statutory instruments. I am advised that, although it is a lengthy document, the revocations mean that it does not increase the overall length of legislation. The work on this order, and to prepare for the implementation of the changes, has required close co-operation between Her Majesty’s Revenue and Customs and the Tribunals Service of the Ministry of Justice, as well as with the judiciary and a wide range of other stakeholders outside government. That co-operation will, of course, continue to be equally important as the remaining steps are taken to prepare for this reform. Treasury Ministers and I are very grateful to all those involved. I beg to move.