HM Revenue & Customs (HMRC) has set out plans for a new regime which will target ‘high-risk’ advisors marketing tax avoidance schemes and may levy fines of up to £1 million for those who fail to comply with its rules.
HMRC has put forward for consultation its latest package of measures aimed at making tax avoidance more difficult.
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This consultation will focus on two main issues: tackling the behaviour of high-risk promoters of avoidance schemes and penalties for users of failed avoidance schemes.
The government has proposed an initial £1 million penalty following by a daily penalty for continuing to provide the information of £10,000.
HMRC said there is evidence that many mainstream tax advisers are increasingly unwilling to advise clients to undertake tax avoidance.
Under the proposals, HMRC will be able to tackle the behaviour of high-risk promoters to increase transparency and obtain information about their products, intermediaries and users.
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By GlobalDataThe consultation also states that once a scheme has been defeated in court by HMRC, users of similar avoidance schemes under investigation could be forced to amend their return or face paying a penalty based on the tax avoided.
David Gauke, exchequer secretary to the treasury, said: "This government is committed to tackling tax avoidance and the proposals in this consultation will allow HMRC to further close in on the cowboy advisers promoting these high-risk schemes.
"HMRC is successful in over 80% of the avoidance cases they take to court so we want to deter taxpayers from using these often unsuccessful schemes and ensure that they pay the tax that is due.
"The vast majority of tax advisers are not high-risk and have moved away from selling aggressive avoidance schemes but; there is still a minority that persists in promoting these schemes. We want to make life as difficult as we can for them and demonstrate that there is no tolerance for aggressive tax avoidance," Gauke added.
The consultation said: "Penalties are designed to act as incentives to taxpayers to comply with their tax obligations, and to reassure those who do comply that they will not be disadvantaged in comparison with those who do not."
This stage of the consultation will close on 4 October 2013.
