HMRC sets out new measures against serial tax avoiders
New proposals to tackle the serial use of tax avoidance schemes have been put out to consultation by HM Revenue & Customs. It follows the announcement by the Chancellor last December that the Government would consult on potential sanctions for repeat users of known avoidance schemes.
Tax avoiders can already face penalties, but the consultation proposes additional financial costs such as a surcharge and additional reporting requirements on users of multiple schemes that fail.
Serial avoiders use multiple tax avoidance schemes at the same time – whether using the same avoidance scheme in more than one year, or using different avoidance schemes – to avoid significant amounts of tax.
The consultation also considers whether, and how, to introduce additional penalties for cases where the General Anti-Abuse Rule (GAAR) applies. The GAAR counters the most abusive avoidance.
As part of its ongoing clampdown on tax avoidance, HMRC is putting in additional resources and has set up the new Serial Avoiders Unit (SAU), which will identify and tackle users of multiple avoidance schemes.
The specialist unit will offer a new hotline service to help people who have used multiple schemes and want to get their tax affairs in order. This will provide a single point of contact within HMRC to facilitate resolution of their tax affairs.
Financial Secretary to the Treasury David Gauke said: “The Government introduced the accelerated payments regime last year to fundamentally reduce the incentive to engage in tax avoidance.
“HMRC has already issued notices worth over £1bn, requiring avoidance scheme users to pay their tax upfront, like the vast majority of taxpayers.
“Today, we are proposing further action, such as penalties, to tackle the small hard-core group of people who repeatedly use avoidance schemes. Our message is clear: it is time to get out of avoidance and start paying your fair share.”