HMRC seeks more power to crack down on tax avoidance promoters

The government has released draft legislation for the 2021-22 finance bill, and among the proposed measures are legislative changes to allow the HMRC to crack down on promoters of tax avoidance.

The proposed legislation will strengthen HM Revenue and Customs’ (HMRC) power to penalise tax avoidance promoters, and support citizens in identifying and withdrawing their assets from such schemes.

The new powers the draft legislation would give to HMRC include:

• The ability to seek freezing orders that would prevent promoters from hiding or moving their assets to avoid paying HMRC penalties;
• An allowance to increase penalties on UK entities working with offshore promoters to facilitate tax avoidance;
• Permission to publicise information about the promoters, such as their names and the details of how they promote tax avoidance, so that taxpayers are able to extricate themselves; and
• The ability to petition the court to begin wind-up proceedings against a company operating against the public interest.

These amendments follow on from an announcement in November 2020 that HMRC intended to go hard against anyone promoting and marketing tax avoidance.

These policies are the result of a 10-week consultation process to identify the economics of promoting tax avoidance schemes and find strategies to disrupt the business model on which they rely.

Source: Financial Accountant click here to read more