ICAEW: promoters of tax avoidance schemes insufficiently targeted

THE ICAEW harbours concerns that HMRC proposals to clampdown on promoters of tax avoidance schemes are “not sufficiently targeted”.

HMRC’s consultation Raising the stakes on tax avoidance proposes a new set of obligations for high-risk promoters, their intermediaries and users. It also encourages users of avoidance schemes to settle their tax affairs after similar cases have lost in court or tribunal.

The obligations include statutory information powers that apply to high-risk promoters so that HMRC can obtain early information about their products, intermediaries and users in order to direct its compliance efforts.

A further power would be the option to name high-risk promoters so as to alert potential users of the danger of entering into promoted schemes.

Chief among the institute’s concerns is the possibility of compliance burdens and costs on tax advisers who are not themselves engaged in the promotion of dubious tax schemes.

It adds that “any proposal to take action against individual promoters should only be carried out after the proposal has been subject to some form of independent scrutiny”.

In a blog posted on its website, the ICAEW’s tax faculty said: “If action is to be taken against high-risk promoters then before any individual or firm is designated as such we believe that there should be a system of independent review of the relevant HMRC proposal similar to the advisory panel under the recently introduced General Anti-Abuse Rule (GAAR). It is not acceptable for HMRC to act as judge and jury in what is a highly sensitive area, particularly given that the measures appear to be too widely targeted.”

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