Raising standards for tax advice – Tackling promoters of tax avoidance

The Government has published (Thursday 12th November 2020) responses to calls for evidence in the market for tax advice and the tackling of promoters of tax avoidance.

Raising standards for tax advice

The Government is publishing a Summary of Responses and Next Steps from the call for evidence on raising standards in the market for tax advice. As a first step towards raising standards, the Government will consult on requiring tax advisers to hold professional indemnity insurance and how to define tax advice. The majority of respondents supported government action to raise standards.

Tackling promoters of tax avoidance

In line with the Government’s strategy to tackle promoters of tax avoidance schemes, published in March, the Government is today announcing that it will consult in the new year on further measures to tackle promoters. These proposals will build on the proposals announced earlier this year and will:

  • disrupt the business model of offshore promoters by making it harder for such promoters to access the UK by making their onshore partners equally responsible for the anti-avoidance regime penalties that the offshore promoter generates.
  • directly tackle the secrecy on which promoters rely; the proposals here would ensure that taxpayers are fully informed of the reality of what is being sold to them.
  • disrupt the economics of tax avoidance by ensuring that, without delay, promoters face financial consequences for continuing to promote tax avoidance so that promoters cannot continue to profit from avoidance while HMRC investigates them.
  • give HMRC additional powers to act against companies that continue to promote schemes and who sidestep the rules designed to restrict their activities. The proposals would see such promoters shut down and restricted from setting up similar businesses.

The Government continues to recognise that the many tax advisers who adhere to high professional standards are an important source of support for taxpayers. The proposals are aimed at targeting those promoters who exploit every opportunity to personally profit by side-stepping the rules and whose unscrupulous actions often leave taxpayers with significant tax bills.

The Government continues to recognise that strengthening HMRC powers in the way described must be done in a carefully constrained way. HMRC will again work with stakeholders, and in particular those tax advisers who adhere to high professional standards, to ensure that these proposals are both effective and proportionate.

PAYadvice.UK 12/11/2020

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