What is the purpose of section 16 of the Commissioners for Revenue and Customs Act 2005?

Section 16 gives legal effect to Part 1 of Schedule 2 to the Commissioners for Revenue and Customs Act 2005. That schedule sets out restrictions and other rules governing how certain functions are to be exercised by the Commissioners or their officers, ensuring powers remain appropriately limited under United Kingdom law.

Why were restrictions needed when HMRC was created?

When HMRC was created by merging the Inland Revenue and HM Customs and Excise, there was a risk that the combined body might end up with broader powers than either predecessor held individually. Part 1 of Schedule 2, activated by section 16, acts as a safeguard against that unintended expansion of authority.

How does section 16 affect HMRC's powers in practice?

In practice, section 16 means that HMRC's powers are not unlimited. Certain functions are subject to specific restrictions set out in Schedule 2, and HMRC must operate within those boundaries. Accountants and professionals should be aware that each function continues to be exercised only within its originally intended scope.

Can you give an example of how section 16 restrictions work?

Before the merger, the Inland Revenue investigated income tax matters and HM Customs and Excise investigated VAT matters. Without Schedule 2 restrictions, HMRC might have been interpreted as having combined or expanded investigatory powers. Section 16 ensures Schedule 2 prevents such unintended broadening, keeping each function within its original scope.

Commissioners for Revenue and Customs Act 2005 section 16

Restrictions, etc.

Section 16 introduces Schedule 2, Part 1, which places restrictions on and makes other provisions about how certain functions of the Commissioners for Revenue and Customs may be exercised.

This section activates Part 1 of Schedule 2 to the Act
Schedule 2, Part 1 restricts how certain functions of the Commissioners may be carried out
It also makes additional provisions connected with the exercise of those functions
The restrictions serve as safeguards to prevent the unintended widening of the Commissioners' powers

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member