Taxpayers who take part in small-scale pilots of new policies should not be disadvantaged compared to the general population, the Chartered Institute of Taxation (CIOT) has urged.

Responding to HMRC's recent consultation on "creating innovative change through new legislative pilots", the CIOT said it supports "innovative approaches" to developing new tax policy, but has some concerns about trialling new processes in a temporary "sandbox".

The tax institute said participation in these trials must be optional, and participants must be protected so they do not end up worse off than if they had not taken part.

Margaret Curran, technical officer at the CIOT, said:

"While we support in principle the idea of HMRC developing an innovative approach to the development of new tax policy, we are concerned that the ‘legislative sandbox' piloting approach described in the consultation document could give rise to problems, particularly if it were to be run as a parallel tax or penalty system rather than as a trial involving a small number of taxpayers.

"We strongly believe participation in any pilot should be voluntary, no one should end up in a worse position than if they had not participated in it, and any adverse tax, interest and penalty position should be promptly corrected by HMRC, while any costs should also be reimbursed."

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