HMRC have published details of a new consultation they are undertaking to tighten the rules that will be applied to tax payers who use avoidance schemes to artificially reduce their tax liabilities.

The press release includes the following ten points that persistent tax avoiders should be aware:

  • HMRC is serious about stopping avoidance: the government is taking unprecedented steps to clamp down on the small minority who try to avoid paying tax that is legally due.
  • Other people are getting out of avoidance: increasing numbers of people involved in multiple avoidance schemes are approaching HMRC to settle up so that they can put the past behind them and protect their reputation.
  • HMRC want to help you to get out of avoidance: HMRC will work with avoiders who demonstrate a commitment to resolving their avoidance arrangements to finalise their tax liability and will provide certainty over payment terms. HMRC has set up a single point of contact to help establish the possible terms for exit from each scheme a serial avoider uses.
  • HMRC is moving more quickly to tackle serial avoiders: as they close in and increase their focus on this minority, HMRC will look ever more carefully at those who use multiple schemes.
  • You are the one who is responsible: even if a promoter or agent has arranged the avoidance scheme for the user, the avoider remains responsible for their own tax affairs and what is put on their tax return. Serial avoiders will personally have to provide HMRC with information and documents regarding their tax affairs.
  • HMRC has a special unit looking at you: the Serial Avoiders Unit is identifying users of multiple schemes who choose not to approach HMRC to settle their affairs.
  • You may personally have to attend meetings with HMRC investigators: HMRC will ask you about your tax affairs and will be checking that they have the full facts about your arrangements.
  • HMRC will look at all your tax affairs: serial avoiders will be subject to a more co-ordinated approach to challenge and resolve their tax affairs. HMRC will look at your current activity, not just enquiries that are already open. And they will look at all the entities and structures you are connected with, to challenge any avoidance and evasion in all areas of your affairs.
  • You may have to pay up front: HMRC will fundamentally reduce the incentive to engage in serial tax avoidance and recover all duties legally due at the earliest opportunity. Multiple users of schemes may receive Accelerated Payment Notices before other users of a scheme.
  • There are heavy sanctions: HMRC will evaluate the behaviour of each serial avoider and this could result in penalties for careless or deliberate behaviour or for any failure to disclose avoidance. Deliberately misleading or concealing information from HMRC could lead to prosecution and criminal conviction.

 As part of the ongoing clampdown on tax avoidance, HMRC 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.

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