Tax avoidance sanctions ‘premature’ – Law Society
THE LAW SOCIETY has “denounced” HM Revenue & Customs’ plans to curb tax avoidance activity as “premature”.
HMRC and the government are proposing to introduce new penalties for serial users of tax avoidance schemes and those whose planning is counteracted by the general anti-abuse rule (GAAR).
In particular, the society harbours concerns HMRC is not using its existing powers to litigate, instead wasting resources by “attempting to introduce new legislation at a time when the deterrent effect of the general anti-abuse rule has yet to be established”.
Further steps against tax avoidance and evasion are expected in this week’s Budget – particularly in light of the HSBC scandal – and chancellor George Osborne (pictured) has dropped heavy hints around introducing a new offence of aiding and abetting tax evasion and aggressive tax avoidance, something aimed squarely at professional services firms.
On the individual tax avoiders front, it is thought repeated promoters and users of schemes could be denied access to tax reliefs, while the practice of naming and shaming could be extended, although concerns persist over the accuracy and fairness of previous name and shame initiatives.
Law Society tax law committee chair Gary Richards said: “The government’s proposals are premature. HMRC’s legislation on follower notices and accelerated payments has only recently been introduced. If these measures meet their objectives, and it is too early to assess this, HMRC’s latest proposals on serial users will be unnecessary.”
