Clamping down on promoters of tax avoidance
Executive summary
AAT agrees with the principle of requiring a security payment or obtaining an asset freezing order in the circumstances described in the consultation document but is unclear as to why the government proposes to take forward one or the other, not both. If both remained as options then HMRC could decide what would be most effective in the circumstances of each individual case.
The proposed “additional” penalty in reality does no more than reflect the amount of the total fees earned by all those involved in the development and sale of that tax avoidance scheme. A genuinely “additional” penalty would be a sum that is additional to all fees earned by those involved. AAT suggests considering an additional 25% penalty charge to act as serious deterrent to many of those involved in the facilitating of offshore promoters’ activities.
AAT does not believe that the disqualification of company directors for tax matters is currently being applied in a reasonable, coherent or fair manner and that this is an area that requires reform.
Joint liability would act as a significant deterrent for promoters whilst simultaneously continuing to deter the public in many cases. This is an idea that some parts of HMRC have expressed a willingness to consider whilst others have ruled out such a change. AAT suggests this be considered across HMRC and recommendations for reform made.
Related consultation responses
Tougher consequences for promoters of tax avoidance
AAT welcomes more information on how often HMRC plans to use its criminal investigation powers and what resources are available to fund it.
HMRC Performance 2020-2021: Public Accounts Committee inquiry
We recognise HMRC's good work in relation to avoidance and evasion but much more could be done. We also believe HMRC must do more in relation to debt recovery.
Autumn Budget and spending review 2021
Our response includes comments on tax after Covid, the national living wage, personal tax, pensions and savings, Corporation Tax, and business rates.