Tax avoidance promoters to publicise their 'monitoring' status
'People who advise on good tax planning…should have nothing to fear from this crackdown'
Promoters of 'high risk' tax avoidance schemes must start publicising the fact that HMRC has issued them a 'monitoring notice', requiring them to change their behaviour.
Promoters will initially be issued with a conduct notice and if they fail to change their behaviour a monitoring notice will be issued.
At this point the promoter will be publicly named by HMRC and will have to tell their current and prospective clients that they are being monitored.
Financial secretary to the treasury, David Gauke, commented: 'Our tough new rules will force high risk promoters to change their behaviour and help protect taxpayers from unscrupulous advice. Promoters who do not change their ways should be in no doubt - HMRC is taking swift and decisive action to use these new rules.'
Failure to comply with the conditions of a monitoring notice will lead to fines of up to £1m.
HMRC has already written to a number of promoters whose practices it considers high risk and has also issued its first conduct notice.
The measures are being taken to ensure that all potential customers are aware of the risks of using high risk tax avoidance schemes.
Nothing to fear
James Hender, head of private wealth at accountancy firm Saffery Champness, believes that the majority of tax advisers will have nothing to fear as a result of the measures.
He commented: 'The number of accountants and financial advisers who will be affected by this will be very small. People who advise on good tax planning, as practiced by the majority of accountants and lawyers, should have nothing to fear from this crackdown'.
Hender's firm has called for reasoned distinctions between tax planning which may be regarded as acceptable and those which are regarded as abusive and aggressive.
'What we need are proper distinctions. It is unhelpful to bracket legitimate tax planning - which the government encourages through tax incentives on investments and savings - with abusive and illegal behaviours,' James Hender added.
Binyamin Ali is assistant editor of Private Client AdviserTags: