Tackling promoters of tax avoidance
Executive summary
- AAT wholeheartedly backs government proposals to tackle promoters of tax avoidance.
- It was reassuring to note HMRC’s statement that "Promoters of tax avoidance schemes are rarely members of professional bodies. A simpler and more effective way of dealing with this problem might therefore be for government to require anyone offering paid for tax/accountancy advice to be a member of a relevant professional body, as set out in some detail in AAT's August 2020 submission to HMRC.
- AAT supports the proposed strengthening of HMRC’s powers to name promoters and enablers and believes the new powers are equally applicable to Disclosure of Tax Avoidance Schemes for VAT and other indirect taxes (DASVOIT) as to Disclosure of tax avoidance schemes (DOTAS).
- The conditions for issuing earlier stop notices achieve a sensible balance between ensuring appropriate safeguards are in place. They also help to ensure HMRC is able to promptly tackle schemes that are destined to fail for the benefit of taxpayers.
- AAT welcomes the proposals to deal with promoters who hide behind other business structures/entities. However, AAT also cautions that manipulative individuals keen to evade justice will likely still find further means of frustrating HMRC here, particularly around the subjective notion of control and influence.
- AAT strongly warns HMRC against the idea of applying a new penalty regime retrospectively from 2017. This is likely to undermine HMRC’s credibility and authority and should therefore be avoided.
- AAT supports HMRC proposals to make it clearer as to how the GAAR procedure is applied to partnerships and to ensure that the general anti-abuse rule (GAAR) works effectively and as originally intended in respect of partnerships.
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.
