PracticeAccounting FirmsViewpoint: HMRC’s carousel initiative blurs boundaries

Viewpoint: HMRC's carousel initiative blurs boundaries

Move on carousel fraud is a further step in the blurring of the line between avoidance and evasion

alex hawkes

Opinion by Alex Hawkes

What is the significance of HM Revenue & Customs’ initiative to get
advisers to condemn carousel fraud?

In one sense, it may seem like a tedious announcement. Tax advisers, who by
definition help to limit client’s tax bills without transgressing the law, are
being asked assert that clients should not transgress the law. There’s nothing
new in that, and when the Big Four made their statement, it was hardly covered
by any of the media for that very reason.

On that basis, that advisers are clearly not involved, one might then ask the
question – why is HMRC doing this? It won’t achieve anything, and smacks of
desperation.

But there is something a little bit more interesting going on here. HMRC says
that  firms may at least be working with clients involved in the frauds. It
feels that banking and accounting professionals may, unwittingly or otherwise,
be providing a support network to fraudsters.

That opens up a slightly more worrying prospect. Should firms be concerned
that HMRC might find a legal avenue to clobber them if they have worked
unwittingly for the fraudsters? Have you done enough to ensure that you knew
what your clients do? If not, perhaps you should pick up the bill.

That seems a very real prospect, and until we know more about what HMRC is
getting at on this issue, and what evidence it has, we will remain in the dark.

It would not be a new development in some respects, as the Bond House case
has shown.

On another level still, the line between evasion and avoidance seems to have
decisively broken down.

David Varney wrote to firms and institutes saying: ‘A small number of tax
advisers mistakenly see carousel fraud as some form of clever tax planning
rather than a dishonest and criminal exploitation of the tax system.’

Advisers, if they have made those points, are doing the profession no
favours. And the Revenue, in targeting honest advisers to catch dishonest
people, will only blur that line even further.

Related Articles

RSM announces growth across every business line in 2017

Accounting Firms RSM announces growth across every business line in 2017

4h Lucy Skoulding, Reporter
WorkStyle: Helping accountants to support new contractors

Accounting Firms WorkStyle: Helping accountants to support new contractors

5d ClearSky Accounting | Sponsored
Grant Thornton grows profits while radically reshaping portfolio

Accounting Firms Grant Thornton grows profits while radically reshaping portfolio

6d Alia Shoaib, Reporter
How to protect LLP firms from a damaging team move

Accounting Firms How to protect LLP firms from a damaging team move

1w Clive Greenwood, Lewis Silkin
Grant Thornton reports gender pay gap at 26.6%

Accounting Firms Grant Thornton reports gender pay gap at 26.6%

3w Alia Shoaib, Reporter
5 ways to adapt your accounting services for millennial clients

Accounting Firms 5 ways to adapt your accounting services for millennial clients

4w Receipt Bank | Sponsored
Smith & Williamson reports double digit growth

Accounting Firms Smith & Williamson reports double digit growth

4w Alia Shoaib, Reporter
RSM UK reports 9% revenue rise

Accounting Firms RSM UK reports 9% revenue rise

4w Alia Shoaib, Reporter