Government clamps down on high-risk tax avoidance promoters

The UK Government is getting tough with tax avoidance promoters, making potential customers aware of the risks of using them.

Under new rules introduced by David Gauke, the Financial Secretary to the Treasury, high-risk promoters of tax avoidance schemes must publicise the fact they are being monitored by HM Revenue and Customs (HMRC) to make potential customers aware of the dangers of becoming involved in schemes that, very often, do not work.

Laws were introduced last summer, giving HMRC the power to issue Conduct Notices to promoters identified as ‘high risk’, imploring them to change their behaviour.

The new rules introduced this week mean if a tax avoidance promoter does not comply directly with the terms of a Conduct Notice, they can be issued with a tougher Monitoring Notice; resulting in HMRC publicly naming them and legally requiring them to inform their clients that they are being monitored.

Those who fail to comply with the conditions of a Monitoring Notice could then face fines up to £1 million.

“The Government has taken unprecedented steps to clamp down on tax avoidance,” said Gauke.

“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.”

HMRC has already written to a number of tax avoidance scheme promoters warning them of the consequences if they fail to change their behaviour; and has already issued the first Conduct Notice to a promoter.

Back in November, HMRC published a list of ‘10 things a promoter won’t always tell you’, which included the possible monetary costs and reputational damage of tax avoidance