That was the warning from the Chartered Institute of Taxation, which has argued that the government’s proposals to strengthen the code of practice on taxation for banks lacked “safeguards and balance”.
Stephen Coleclough, president of the CIT, said the general anti-abuse rule should be enough to clamp down on dubious tax arrangements.
Instead, the government plans to give HMRC powers to judge whether a bank is contravening the code, he said, with only a judicial review allowed after the violation is publicly announced.
Mr Coleclough said: “Judicial review alone is an inappropriate and inadequate remedy. It is unprecedented that HMRC can make a decision about a taxpayer, make it public and yet deny access to the normal appeals process. A proper hearing on the merits, by an independent tribunal, before any action is taken, is what normal principles of fairness and justice require.
“Banks have been subject to plenty of criticism for their actions over recent years. But that does not mean they should be denied the right to fair legal process.”