The Government is about to get tough on those who dodge paying tax by joining multiple avoidance schemes, DSH Chartered Accountants & Business Advisors has warned.
At the end of January, HMRC published a consultation paper, Strengthening Sanctions for Tax Avoidance, which sets out proposals to tackle the serial use of tax avoidance schemes.
It proposes additional financial costs, such as surcharges, and additional reporting requirements over and above the tough penalties tax avoiders can already face.
It also considers whether, and how, to introduce additional penalties for cases where the General Anti-Abuse Rule (GAAR) applies. The GAAR is designed to counter the most abusive avoidance cases.
The launch of the consultation paper follows the establishment of HMRC’s Serial Avoiders Unit (SAU), which aims to identify and tackle users of multiple avoidance schemes.
“Serial avoiders are defined as those who use multiple tax avoidance schemes to avoid paying significant amounts of tax, whether that’s using the same scheme more than once a year or different schemes at the same time,” said Steve Carpenter of DSH’s Maidstone office.
“The taxpayer is solely responsible if avoidance schemes have been used, even if an advisor or agent has arranged the use of the scheme, and serial avoiders will have to provide HMRC with details of their tax affairs.”
Steve added that anyone being investigated for Serial Avoidance would have all of their tax affairs examined by HMRC, and may have to pay any sums owed up front through Accelerated Payment Notices.
“While this is billed as a consultation document, there can be no doubt HMRC is serious about stopping tax avoidance,” he added.
While HMRC has said it will work with avoiders who come forward voluntarily and show a real commitment to disclosing their avoidance measures and finalising payment of debt owed, there are heavy sanctions for those they find to have carelessly or deliberately avoided payment of tax, including potential prosecution and criminal conviction.
“At DSH we help our clients handle their finances in a tax efficient way, without overstepping the line into tax avoidance schemes,” said Steve.
“Our experts can also help those concerned that they could be regarded as serial avoiders with handling any HMRC enquiry and formulating an acceptable debt repayment plan.”
Anyone with concerns over their tax affairs can contact Steve Carpenter on 01622 690666 or visit www.dsh.co.uk.