Government plans to expand rules requiring the disclosure of tax avoidance
schemes to HM Revenue & Customs are likely to result in more schemes being
shut down, although it may boost business for tax advisers, experts have said.
In last week’s Budget, chancellor Alistair Darling announced plans to
increase penalties for failure to disclose tax avoidance schemes, and begin
discussions on how to spot aggressive avoidance schemes.
HMRC is also considering extending the criteria for disclosing an avoidance
scheme, as part of a review into the
Disclosure of Tax
Avoidance Schemes (DOTAS) rules. Schemes currently must be reported if they
bear certain ‘hallmarks’.
Simon Palmer, head of international tax services at KPMG, said it was ‘almost
inevitable’ that the review of DOTAS rules will mean more tax planning schemes
are closed at an earlier stage.
But the tougher line on tax avoidance, combined with the 50% income tax rate,
could have a silver lining for accountants. Mike Down, tax investigations
partner at Baker Tilly, said: ‘[The DOTAS review] will boost demand for tax
planners, but whether the tax schemes will work is another question.’
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