The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
A consultation has been published to introduce legislation that will require taxpayers with outstanding tax liabilities relating to offshore interests, where they have yet to put their UK tax affairs in order, to come forward and correct those liabilities by September 2018.
The consequence of not meeting the requirement and carrying out the necessary correction within the defined window would see the taxpayer subjected to a new set of legal sanctions for ‘‘failing to correct’’.
This consultation invites views on the proposed principles and design aspects including a toughened offshore penalties framework and introducing an obligation for taxpayers to put past affairs in order before tougher penalties are introduced and Automatic Exchange of Information agreements come into full effect in 2018.
A Requirement to Correct past offshore tax non-compliance was first announced at Autumn Statement 2015 and confirmed at Budget 2016 and subject to agreement, legislation is planned through the Finance Bill 2017.
Back to Contents
What you need to know about tax avoidance 9 September 2016
Tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended. Find out what can happen to you if you enter into a tax avoidance scheme.
HMRC has published an introduction to tax avoidance which provides ways of identifying tax avoidance schemes and what to do if you think you might be in a scheme.
What tax avoidance is Tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law. Most tax avoidance schemes simply do not work, and those who engage in them can find they pay more than the tax they attempted to save, once HM Revenue and Customs (HMRC) has successfully challenged them. How to identify tax avoidance schemes Here are some of the warning signs that you might be in a tax avoidance scheme or that you are being offered to join one. It sounds too good to be true It probably is. Some schemes promise to lower your tax bill for little or no real cost. They will say you do not have to do much more than pay the scheme promoter and sign some papers. Pay in the form of loans Some schemes designed for contractors involve giving you some or all of your payment in the form of a loan that you’re not expected to pay back. It’s diverted through a chain of companies, trusts or partnerships and you’ll be told this is to save you tax. Huge benefits The benefits of the scheme seem out of proportion to the money being generated or the cost of the scheme to you. The scheme promoter will claim there’s very little risk to your investment.
Round in circles The scheme involves money going around in a circle back to where it started, or some similar artificial arrangement.
HMRC has given it a Scheme Reference Number (SRN) This is where HMRC has identified the arrangement as having the hallmarks of tax avoidance and are investigating it. You will have been given an SRN by your promoter and will have included it on your tax return. Having an SRN doesn’t mean that HMRC has ‘approved’ the scheme. HMRC does not approve any tax avoidance schemes. Schemes HMRC has concerns about You can find examples of tax avoidance schemes HMRC is looking at closely . Even if a scheme is not mentioned, it will still be challenged by HMRC.
If you enter into a tax avoidance scheme If you’re involved in a tax avoidance scheme HMRC will fully investigate your tax affairs, and may also:
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
Page 578 of 588
Made with FlippingBook - Online magazine maker