Hartnett says disclosure regime will smash 50% avoidance

Dave Hartnett has said the disclosure rules for avoidance schemes, will stop errant advisers lining their pockets at the expense of the UK and dent efforts to avoid the 50% top rate of tax.

The Disclosure of Tax Avoidance Schemes legislation is designed to come down hard on advisers if HMRC believes they have not been notified of a tax planning measure, but some advisers have panned it for being too heavy-handed.

Hartnett defended DOTAS, saying it played a key part in the battle against tax avoidance.

"The disclosure regime has played an incredibly important role in limiting the ability of the tax avoidance industry to line its pockets at the expense of the UK," he said.

"The Chancellor has allowed us to build on the success of DOTAS by including avoidance schemes targeted at people intent on getting round the 50% rate of income tax."

Increased penalties for those who fail to tell us of schemes they are marketing will make DOTAS even more effective in helping to understand exactly how the industry is evolving Hartnett added.

This would allow the government to frame more "abuse proof" legislation and simultaneously giving early warning of schemes, Hartnett said.

Further reading:

HMRC wants to name and shame tax advisers

Budget 2010: Tax avoidance crackdown has more bark than bite