Tougher consequences for promoters of tax avoidance
We have responded to the HMRC Consultation Tougher consequences for promoters of tax avoidance.
This consultation follows HMRC's strategy for tackling promoters, published in March 2020, which set out a range of approaches to disrupt the promoter market, reducing both the supply of and demand for avoidance schemes. This included making changes to existing anti-avoidance regimes, enabling HMRC to obtain more information about promoters earlier and to act against them faster.
This latest Consultation looks to further HMRC’s ability to take on and tackle the small but persistent number of promoter organisations who continue to operate in this marketplace.
It seeks comments on two proposals:
- The inclusion of a new criminal offence for promoters of tax avoidance who fail to comply with a HMRC notice to stop promoting an avoidance scheme; and
- The expedition of the disqualification of directors of companies promoting tax avoidance
Our key points are:
- The ATT wholeheartedly agrees that there is no place in our society for those involved in the creation, promotion, and sale tax avoidance schemes and fully supports the Government’s work in deterring, disrupting and otherwise frustrating promoters of tax avoidance.
- A criminal sanction will only be a deterrent to the extent that it is enforceable in the country in which promoter organisations reside.
- Given the severity of a criminal conviction, the opportunity should be taken to review the POTAS legislation in its entirety and strengthen the safeguards around the use of Stop Notices by building in independent oversight and operational transparency.
- In relation to director disqualifications, we are calling for appropriate training and the dissemination of more promotional material on director’s fiduciary duties.
More details on the above points can be found in our full response.