Users of failed tax avoidance schemes will face penalties, and government will clamp down on high-risk promoters under new proposals.
The government is consulting on proposals to tackle the behaviour of high-risk promoters of avoidance schemes, including naming high-risk promoters, a range of new information requirements and other associated penalties. Tackling the supply of and demand for avoidance schemes, Raising the stakes on tax avoidance follows on from the 2012 Lifting the lid on tax avoidance schemes consultation. The 2012 consultation highlighted the behaviour of high-risk promoters as a problem for HMRC, tax advisers and representative bodies and this consultation seeks views on proposals to address this. One proposal for tackling the behaviour of high-risk promoters is to ‘name and shame’ them. HMRC does not currently have the power to name promoters of avoidance schemes whose behaviour is high-risk; Raising the stakes on tax avoidance consultation looks to give HMRC the power to do so unreservedly. Naming high-risk promoters will publicly identify them, distinguish them from mainstream tax advisers and make sure that their customers know who they are dealing with. Other proposals include new information powers so that HMRC gets early information about the avoidance schemes which these high-risk promoters are promoting and penalties of up to £1 million for failing to comply with the information powers. For avoidance schemes users the stakes could be equally as high. Once a scheme has been defeated in court by HMRC, users of similar avoidance schemes under investigation could be forced to amend their return or face paying a penalty based on the tax avoided. Aimed at making sure tax avoiders settle their tax liabilities quickly, imposing penalties for failed avoidance schemes will also act as a deterrent. This will help HMRC clear cases more quickly and will reduce the amount of time spent on litigation. The vast majority of tax advisers are not high-risk and have moved away from selling aggressive avoidance schemes but; there is still a minority that persists in promoting these schemes.
This stage of the consultation will close on 4 October 2013.
The policy team will be reviewing this consultation and will publish a survey shortly if deemed necessary.
HMRC REVIEW OF TAX AVOIDANCE DISCLOSURE REGIMES
13 August 2013
HMRC is inviting anyone with experience of tax disclosure schemes to share their views.
HMRC is conducting a full review of the UK’s disclosure regimes - the Disclosure of Tax Avoidance Schemes (DOTAS) regime and the VAT Disclosure Regime. The review is due to be complete by March 2014. This review will consider the success of the regimes since their introduction in 2004, how they're operating against policy objectives, levels of compliance with the regimes and the burden they place both on taxpayers and HMRC.
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CIPP Policy News Journal
16/04/2014, Page 475 of 519
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