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HMRC set for new powers to target tax scheme promoters

by Alex Steger on Dec 12, 2012 at 10:35

HMRC set for new powers to target tax scheme promoters

The government is set to launch a consultation to give HM Revenue & Customs (HMRC) increased powers to target promoters of high-risk tax avoidance schemes.

Next year the government will consult on giving HMRC ‘a package of penalty and information powers’ specifically targeting promoters of schemes 'which have a negligible or low probability of providing the advertised tax advantage or involve or facilitate some element of concealment or misdescription'.

The government said measures being introduced in the financial services bill were not on their own sufficient to deter high-risk promoters from marketing such schemes.

It also plans to hand the taxman more information powers around the disclosure of tax avoidance schemes (Dotas).

The Finance Bill 2013 will contain regulation-making powers so that HMRC can require avoidance scheme members to pass over information to the promoters, and for the promoters in turn to give HMRC information when required about clients in the scheme.

6 comments so far. Why not have your say?

Paul Davis

Dec 12, 2012 at 14:36

I find this amusing especially when HMRC slated Rangers FC via the national media for the supposed inappropriate use of an EBT only to end up losing their case in the Courts which has ended up costing the taxpayer in court fees and I assume some element of compensation! The morality of tax avoidance is a personal issue and not a legal one.

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Nick White

Dec 12, 2012 at 15:55

"The morality of tax avoidance is a personal issue and not a legal one".

Surely the whole existence of the state, and the necessity of funding it, and the framing of the laws that enforce the funding of it, are moral issues that affect us all ? The proper extent of the state and the proper level of taxes are up for debate, but that debate is surely a public one, not just a question of private conscience.

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WGFS

Dec 12, 2012 at 16:52

Agreed. The issue of lending ridiculous sums to people that could not afford to pay for house prices that were going up for ever .....was not a legal one but a moral one. The moral route might have been .....not to have lent and acted responsibly but they did and people borrowed.

The same set of rules applies re tax and firms selling aboidance measures and clients seeking absolute mitigation , there will always be firms that sail close to the wind using the fact that its legal and there is some loophole that can be exploited and there will always be some IFA happy to run with it ( although they often dont fully understand how these things work) but there are some juicy fees ( alarm bells ringing ....) and an investor that's happy to avoid making their contribution but refers to IFA who says don't worry these guys know what they are doing ....look at the QC opinion and the law ....

Heavier regulation and penalties for those that don't make a fair contribution to the system is a good thing perhaps regulating the promoters is not a bad idea as the end investor often is a footballer or film star and not sophisticated from an understanding pint of view.

This proposal makes me feel slightly better given the tax that I have to pay ....pps also as long as the revenue being collected by HMRC and given to UK gov is used sensibly and not frittered away.... That's another story..

There are plenty of sensible tax planning opportunities available without investing in a film ....or a treasure hunt ....what about a HMW individual investing £50k through a local start up business reducing some risk by using Seed EIS relief and mitigating up to 78% tax (50% income and 28% CGT). You never know it could benefit your local community and also make you some money ....and it's better for us all as it means local employment and often not complicated financial offshore trust structures !!

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Zoomer

Dec 12, 2012 at 17:02

WGFS

All very good points re the Seed EIS; however would there be enough money to be made in these schemes for the promotors of tax avoidance schemes as after all this is all about £ and has nothing to do with morality or helping anyone.

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Pat Riot

Dec 13, 2012 at 16:32

WGFS,

Why would anyone invest in that and get a tax break when some clever tax lawyer / accountant can devise a risk free way of abusing those provisions so that the money get round tripped through some film leasing structure or similar? Perhaps we ought to class agressive tax avoidance and evasion as theft and then have some Sharia-Compliant penalties for it?

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WGFS

Dec 13, 2012 at 17:18

A bit strong but all those in favour raise their right hands ...... I picture quite a few hands missing !!

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