New Rules on Tax Avoidance Advisors
A new Government proposal has been announced to deal with tax advisors who promote aggressive tax avoidance schemes.
The plan, announced by David Gauke, the Exchequer Secretary to the Treasury, is to increase pressure on promoters of abusive tax schemes and make it easier to identify such schemes.
The current Disclosure of Tax Avoidance Schemes (DOTAS) rules will be strengthened by, for example, giving HMRC more powers to force "cowboy" tax advisors to "open up" about tax avoidance schemes and who is using them.
The measures will also make it easier for HMRC to impose fines on rogue advisors who fail to provide information on tax avoidance schemes and those who use them.
The news comes two years after the coalition Government announced its stance on tax policy, in the 2010 Budget and then in its Tackling Tax Avoidance (PDF) paper last year.
An important part of the issue of tackling tax avoidance is that the Government has set out the criteria to be used when announcing any unscheduled tax changes, particularly needed when closing tax loopholes.
David Gauke said, in a speech at Policy Exchange last month;
“We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill. These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence. And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.”
Gauke added that DOTAS had helped HMRC close off opportunities to around £12.5 billion of tax avoidance over the years but that whilst the landscape changes so must the schemes to guard against those who avoid paying their fair share of taxes.
Gauke finished by saying:
“But we are still determined to do more to maintain a level playing field for all taxpayers, and stop those who seek to game the system at the expense of others. The actions we are taking and our consultation today should reaffirm our determination to ensure that everyone pays their fair share, whether companies or individuals. I hope that with the co-operation and input of all who have an interest in seeing a fair and transparent tax system, we can deliver a system that is robust to those few who might exploit it.”