Autumn Statement: tax gap under further attack

Autumn Statement: tax gap under further attack

New penalties are planned for those who enable the use of a tax avoidance scheme, announced in the Autumn Statement speech

New penalties are planned for those who enable the use of a tax avoidance scheme, announced in the Autumn Statement speech.

“The UK tax gap is now one of the lowest in the world”, claimed Philip Hammond yesterday “We must constantly be alert to new threats to our tax base, and be willing to move swiftly to counter them”.

The budget publicised the removal of the tax benefits in terms of employee earnings, which will now apply to the self-employed and employers.

The AAT found that the “hard stance” adopted by the prime minister on the issue of tax avoidance has reared its head again with the chancellor’s announcement to further strengthen sanctions and deterrents on disguised remuneration tax avoidance schemes.

Jonathan Riley, head of tax, Grant Thornton, said: “As expected, the Chancellor announced that legislation would be introduced to penalise not just those who use defeated tax avoidance measures, but those who enable it, including professional advisors. The detail of this legislation needs careful review as it might easily catch planning that is intended by Parliament.”

Hammond also announced that the inappropriate use of the VAT flat rate scheme, to help small businesses, will be shut down.

James Hender, head of private wealth and partner, Saffery Champness, said: “Clamping down on inappropriate use of reliefs was inevitable, but the Chancellor should be careful not to hit innocent people.”

The Government has also previously announced a consultation on a new legal requirement for intermediaries arranging complex structures for clients holding money offshore to notify HMRC of the structures and the related client lists.

Jason Collins, head of tax, Pinsent Masons, commented: “No detail has been provided today but the Government has said the new rules will ‘reflect’ responses to the consultation over the summer.”

This new regime on anti-avoidance will reflect an extensive consultation and input from stakeholders and details will be published in draft legislation shortly.

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