The government is getting tough with financial advisers who dream up controversial tax management schemes for the wealthy.
Exchequer Secretary to the Treasury, David Gauke has announced plans to increase the pressure on advisers who market schemes that ‘artificially and aggressively’ cut tax and to make identifying the schemes easier.
The proposals include making the Disclosure of Tax Avoidance Schemes (DOTAS) rules stronger and more effective weapon in the battle against tax management by giving HMRC stronger powers to force promoters to tell them about avoidance schemes and who is using them.
The new rules will include new rules for imposing penalties for failing to tell HM Revenue & Customs about a scheme.
The government is also looking at naming and shaming advisers selling financial management schemes so taxpayers can spot schemes that may break tax rules.
David Gauke said: “Some might say that consultation documents on tax administration are an effective cure for insomnia, but this is one that will keep the promoters of aggressive tax avoidance schemes awake at night.
“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.
“The DOTAS regime has assisted HMRC greatly over the years, closing off around £12.5 billion in avoidance opportunities. As the avoidance landscape changes, so must it. The major reforms to the system we consult on today can, informed by responses, place DOTAS once again at the forefront of anti avoidance measures globally.”
