Lexis®Library update: HMRC consulted until 1 June 2021 on the following four proposals to further strengthen HMRC’s powers in relation to tax avoidance promoters:
• a new power for HMRC to seek a court order to secure a promoter’s assets to pay tax avoidance regime penalties, where the promoter has moved or hidden those assets in order to avoid paying penalties
• additional penalties for UK entities who are involved with an offshore promoter
• winding-up orders targeting companies involved in promoting or enabling tax avoidance and the power to disqualify directors at the earliest point possible
• powers for HMRC to publish information about avoidance schemes that it is inquiring into and to correct false statements, to help taxpayers avoid or exit such schemes
The Law Society supports the government’s aims to tackle promoters of mass-marketed avoidance schemes, but:
• any measures should be ‘appropriately targeted at the mischief they seek to prevent’
• threshold conditions for the application of the proposals should be strengthened to ensure they do not catch legitimate tax advisers or restrict the ability of taxpayers to obtain bespoke advice on their tax affairs
• the strengthened sanctions should apply only where any reasonable adviser would consider the arrangements abusive and where the GAAR would apply, or where there are material breaches of the POTAS rules
• HMRC’s exercise of powers under any new provisions should be effectively supervised
HMRC’s consultation ‘Clamping down on promoters of tax avoidance’ also included a useful list of the principal anti-avoidance legislation (Annex A) together with an overview of promoter and enabler penalties including the changes in Finance Bill 2021 (Annex B).
Source: Clamping down on promoters of tax avoidance – Law Society response
This content was first published by LNB News / Lexis®Library, a LexisNexis® company, on 8 June 2021 and is published with permission. Further information can be found at: https://www.lexisnexis.co.uk/
