The Institute said it opposed the measures, which link together similar cases so that a court ruling against one taxpayer also applies to any ‘follower cases’.
CIOT said it accepted the proposals as a temporary solution, but was opposed to them being used on a wider scale.
Often the cases will involve hundreds of taxpayers using the same scheme, or a close variant of it, from the same company. All involved will then have to pay the excess fees demanded by HMRC.
CIOT president Stephen Coleclough said that while the proposals are needed to stop the courts from getting “jammed up” by outstanding cases, care must be taken before they are enforced on a wider scale.
He said: “Handing HMRC almost unprecedented executive powers to decided who falls within the mischief they intend to deal with, without the usual safeguards and appeal rights, is not something which should be done lightly.
“If this to proceed, HMRC should issue comprehensive guidance at the same time as the Bill is published to show what situations are to be tackled in this way. It should only apply to members of the same scheme or very close variants of it.
“These emergency measures should not be a permanent state of affairs.
“Without exception, our members have expressed their deep concerns about the lack of safeguards in the proposed measures and what they see as the erosion of the principles of a fair justice system.”
The measures give ‘follower cases’ a chance to get their tax back through appeal. But CIOT believe the Government intends to encourage taxpayers to either not pursue or to expedite cases they believe will fail.
The CIOT also oppose a proposal requiring all taxpayers who are members of schemes notified to HMRC under Disclosure of Tax Avoidance Schemes or General Anti-Abuse legislation to pay tax up front. They called it an introduction of retrospective legislation.
Coleclough explained: “The fact that there has been disclosure indicates an intention to be open and transparent with HMRC.
“In a number of cases the disclosure has been made even if the promoter or tax payer did not believe it to be strictly necessary ‘to be on the safe side’.
“To extend HMRC’s powers without safeguards o taxpayers who by definition have been transparent with the tax authority is unjustifiable.”