Penalties for tax agents, financial institutions and other intermediaries for facilitating tax avoidance

17 August 2016

Public Consultation on proposals – 17 August – 12 October


HMRC have announced proposals to penalise those who they suspect have been involved in the design, marketing or facilitation of tax avoidance schemes. This is the latest measure in the government’s wider crackdown against tax evasion and avoidance.


Until now, HMRC have focussed their efforts on the individual end-users of such schemes and have not been able to target those helping to facilitate the arrangements, no matter how artificial and contrived the arrangements. The new proposals build on the legislation in Finance Act 2016 to target the Promoters of Tax Avoidance Schemes (“POTAS”). The potential scope is very wide-ranging, capturing anyone who “benefits financially from enabling others to implement tax avoidance arrangements.”


They are aimed at banks, accountants, lawyers, Independent Financial Advisers, trustees and other agents who may have played a part in the development or “facilitated the use” of an avoidance scheme. Even earning fees or commissions in connection with marketing can bring someone into scope, even if they have not been involved in the actual promotion.


It is proposed that the penalties will be up to 100% of the tax lost to the exchequer as a result of the scheme. This may be significant, especially where the scheme is used by a number of individuals.


The consultation process


The public consultation will run from 17 August to 12 October. Given the immediate reaction to the proposals, we anticipate that there will be a large response.


Full details of the Consultation can be found on HMRC’s website.


Hansuke will be responding to the consultation and we will publish a summary of our submission.


Next Steps


Given the wide-ranging nature of the proposals, we strongly recommend that all interested and potentially affected parties should submit their comments to HMRC directly and through their trade associations.

Contact us

Ali Kazimi

Managing Director

Tel: +44 (0) 203 865 0626

Mohsin Talati

Senior Manager Tel: +44 (0) 203 865 0625

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