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Tax avoidance schemes subject to a stop notice Published: 14 April 2023 Emailed: 19 April 2023
HM Revenue and Customs (HMRC) has published a list of tax avoidance schemes that are subject to a stop notice.
Stop notices are one of the ways in which HMRC tackle tax avoidance and those responsible for promoting it. The main aim of issuing stop notices is to reduce the number of tax avoidance schemes that are being marketed. HMRC believes this makes it harder for people to get caught up in them. If a promoter fails to comply with a stop notice they can face penalties of up to £100,000 which can increase to up to £1 million in certain circumstances. Under the Promoters of Tax Avoidance Schemes (POTAS) regime, HMRC can publish information about promoters of tax avoidance schemes that are subject to a stop notice, and details of the scheme specified in the notice. The POTAS rules apply to promoters of tax avoidance schemes. These rules aim to discourage the development and marketing of avoidance schemes. HMRC can also publish details of the arrangements included in the stop notice once the notice has been sent. However, the promoter or other persons subject to a stop notice can appeal, and HMRC cannot publish the name of the promoter or other persons subject to a stop notice before the appeal period has ended.
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A new failure to prevent fraud offence Published: 14 April 2023 Emailed: 19 April 2023
The government has published the ‘Factsheet: failure to prevent fraud offence’ and is creating a new failure to prevent fraud offence to hold organisations to account, if they profit from fraud committed by employees.
It has been reported that fraud is the most common offence in this country, amounting to 41% of all crime in the year ending September 2022. The new offence will apply across the UK, to all large organisations and in all sectors. It will improve fraud prevention and protect victims by closing loopholes that have allowed organisations to avoid prosecution in the past. Under the new offence, an organisation will be liable, where a specified fraud offence is committed by an employee or agent, for the organisation’s benefit and where there were no reasonable fraud prevention p rocedures in place. However, the government expresses an individual where they did not consent or know of the offence happening will not be prosecuted on fairgrounds. In addition, the government believes this will discourage organisations from ignoring fraud by employees which may benefit them. The offence will encourage more companies to implement or improve prevention procedures, driving a major shift in corporate culture to help reduce fraud. Once parliament has approved the Economic Crime and Corporate Transparency Bill, only then will the offence come into force. The government will publish guidance providing organisations with more information about reasonable procedures ahead on the bill coming into practice.
The government’s policy paper says:
‘‘Having effective fraud prevention procedures is good for business. These proposals will level the playing field for businesses that already take fraud prevention seriously, by penalising unscrupulous operators. Businesses, including small and medium enterprises (SMEs), are often the victims of fraud by other corporations and will benefit from greater protection. The offence has been designed to drive change and facilitate prosecutions without duplicating existing legislation or policy or placing unnecessary burden on legitimate business. For example, the offence will only apply to large companies, to avoid disprop ortionate burdens on SMEs and support economic growth.’’
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