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HMRC sets out plans for stricter tax avoidance regime

by Brian Cantwell on Aug 12, 2013 at 14:16

HMRC sets out plans for stricter tax avoidance regime

HM Revenue & Customs (HMRC) has set out plans for a new regime which will target advisers marketing tax avoidance schemes and give the taxman the power to levy fines of up to £1 million for those who fail to comply with its rules.

Under the plans advisers who offer aggressive tax planning products will be categorised as high risk and will have to comply with the new rules on reporting and transparency.

Failure to do so could see a penalty of up to £1 million with a continuing failure penalty of £10,000 for each day that the failure continues after the initial penalty is imposed.

Promoters who fail to disclose the nature of tax schemes to advisers face a £50,000 fine.

HMRC also plans to impose a higher standard for a reasonable excuse or reasonable care defence, so promoters will find it harder to make excuses for dodging fines and not complying with the new rules.

HMRC said its motives behind the new regime were:

  • to deter the use of avoidance schemes from the outset;
  • to change the behaviour of high-risk promoters and those who are potentially high-risk
  • to force high-risk promoters to provide details of their products to HMRC
  • to require high-risk promoters to inform their clients of the consequences of their high-risk designation
  • to establish a higher threshold for reasonable excuse and reasonable care
  • to ensure that the high-risk promoter’s clients understand the risks and consequences of engaging in these schemes, including the new follower penalties.

David Gauke (pictured), exchequer secretary to the Treasury, said: ‘Never before have the stakes been raised so high and the disincentives to market and participate in avoidance so strong. I welcome public input into the proposals in this document and their further development.’

The consultation closes to responses on 4 October.

3 comments so far. Why not have your say?

levelplayingfield?

Aug 12, 2013 at 15:03

The endgame?

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John Borgars

Aug 12, 2013 at 15:18

@ levelplayingfield?

The end-game is where the only avoidance plans are those marketed by successive Chancellors of the Exchequer

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a point worth noting

Aug 17, 2013 at 14:52

CAN THEY PLEASE STOP ADVISERS WHO HAVE DE AUTHORISED THEMSELVES HAVING SOLD ALL THIS RUBBISH BEFORE AND ARE NOW PUNTING THIS STUFF AND DOING IT UNDER THE IFA BRAND, BUT HIDING BEHIND A WEAK ADVISER THEY RECRUIT TO TAKE THE FLACK.....SOO MANY DOING IT...WAKE UP AND STOP THEM! THEY ARE STILL GETTING AWAY WITH IT!

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