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.
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.
Tel: +44 (0) 203 865 0626
Senior Manager Tel: +44 (0) 203 865 0625
This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Hansuke Consulting Limited would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Hansuke Consulting Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.