Tax avoidance enablers to face tough new penalties
The focus on tax avoidance schemes and users of such schemes has steadily increased over the last few years. This is largely because of the UK economy producing lower than expected tax yields. The economy is still recovering from the banking crisis and has suffered a further blow caused by the Brexit vote.
The media and HM Revenue & Customs have focussed on the users of tax avoidance schemes with many well-known celebrities and sports personalities caught up in the frenzy.
The Treasury and HM Revenue & Customs have published a consultation document which proposes to levy penalties on enablers of tax avoidance schemes. Enablers are not only those who design, promote and market avoidance schemes, but also includes anyone in the supply chain who benefits from an end user implementing tax avoidance arrangements. Penalties up to 100% of the tax underpaid by users of failed tax avoidance schemes are being proposed for enablers.
The purpose of these proposals is to discourage enablers of tax avoidance schemes and to provide sanctions on enablers of failed tax avoidance schemes. Currently penalties may be levied on users of failed tax avoidance schemes depending on whether their behaviour can be classified as “careless” or “deliberate”, but not on enablers of such schemes.
The Government also proposes the option of naming enablers who are subject to this new penalty in the interest of alerting and protecting taxpayers who wish to be compliant and to deter those who might otherwise be tempted to engage in enabling tax avoidance.
Further information on the consultation can be found on the link below.Talk to Barnes Roffe today