Anti-avoidance Measures

Disguised employment IR35 reform

The government will consult with stakeholders this year on how to improve the effectiveness of the intermediaries’ legislation (IR35) to protect against disguised employment.

Employment intermediaries and tax relief for travel and subsistence

The government has published a consultation document on detailed proposals to restrict tax relief for travel and subsistence for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. The changes will take effect from 6 April 2016.

Controlled foreign companies (CFCs)

Companies will be prevented from using UK losses and reliefs against a CFC charge from 8 July 2015.

Direct recovery of debts

New legislation will modernise and strengthen HMRC’s powers to recover tax and tax credit debts directly from debtors’ bank accounts, including funds held in cash ISAs. The measure will be subject to robust safeguards, including a county court appeal process and a face-to-face visit to debtors before they are considered for debt recovery in this way.

Financial intermediaries

Legislation will require financial intermediaries, including tax advisers, to notify their customers about the common reporting standard, the penalties for evasion and the opportunities to disclose.

General anti-abuse rule (GAAR) penalty

The government will consult on the detail of introducing a GAAR penalty and consider new measures to strengthen the GAAR.

Serial avoiders

The government will consult on measures to deal with serial avoiders who persistently enter into tax avoidance schemes that are defeated.

Resources and powers to tackle evasion and avoidance

The government is providing additional resources to HMRC to step up criminal investigations into serious and complex tax crime; tackle non-compliance by small and mid-sized businesses, public bodies and affluent individuals; tackle evasion, avoidance and aggressive tax planning by large businesses; target noncompliance by wealthy individuals; and tackle serious noncompliance by trusts, pension schemes and non-domiciled individuals. The government is consulting on further measures including naming serial avoiders.

Subject to consultation, a ‘special measures’ regime will be introduced to tackle businesses that persistently adopt highly aggressive behaviour associated with tax planning. There will be an extension to HMRC’s powers to acquire data from online intermediaries and electronic payment providers to find those operating in the hidden economy. A new digital disclosure channel will make it simple for taxpayers to disclose unpaid tax liabilities.

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