Monday, 23 July 2012

New Powers To 'Name And Shame' Tax Avoiders

Promoters of aggressive tax avoidance schemes will be forced to disclose their client lists under a proposed government crackdown to be announced today.
Following a wave of revelations about the financial loopholes used by the rich and famous to legally side-step hefty tax bills, HM Revenue and Customs is set to target companies who offer deals that stretch the law to its limits.
Treasury Minister David Gauke will tell the Policy Exchange think tank scheme operators will be "named and shamed" for sharp practice.
Officials often hit a dead-end when investigating schemes that are based off-shore, but under the proposals UK promoters will be made to hand over customer databases to inspectors.
That information will be used to formally warn clients directly about the deals they have signed up to and to work out how much tax they owe if the scheme fails.
Under the reforms, which will go out to consultation, a promoter who has been penalised for not complying with the rules will also have to provide extra information to HMRC on all of their schemes, not just the one they were reprimanded for.
Mr Gauke will say: "We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill.
"These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence.
"And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride."
Last month comedian Jimmy Carr admitted to making a "terrible error of judgment" after it emerged he used a complex scheme to reduce his tax bill.
The K2 tax-avoidance scheme Carr is said to have used enables members to pay income tax rates as low as 1%.
Tax avoidance represents nearly 14% of the UK tax gap, according to the Treasury.

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