Serial tax avoiders will be targeted by the Conservative government, which is set to publish a consultation ahead of legislation in the Finance Bill 2016.
Chancellor George Osborne announced the plans in his summer Budget this afternoon, aiming at serial avoiders who persistently enter into tax avoidance schemes which are defeated.
These include a special reporting requirement and a surcharge on those whose latest tax return is inaccurate as a result of a further defeated avoidance scheme, restricting access to reliefs for the minority who have a record of trying to abuse them, plus developing further measures to name serial avoiders.
The scope of the Promoters of Tax Avoidance Schemes regime would be widened by bringing in promoters whose schemes are regularly defeated.
Meanwhile, the General Anti-Abuse Rule (GAAR) penalty will be consulted on to consider the detail of its possible further strengthening.
Mr Osborne stated “we are going to add tough new penalties to our General Anti-Abuse Rule, and name and shame serial users of failed tax avoidance schemes”.
He also added later in the speech that the government has found annual savings of £12bn from welfare and £5bn from tackling tax evasion, avoidance, planning and imbalances in the tax system.
Neal Todd, partner at City law firm Berwin Leighton Paisner, stated it was disappointing that the chancellor sought to introduce penalties for tax planning that falls foul of the GAAR.
“The GAAR has only recently been introduced to the UK tax system (it became law in 2013) and its ambition is wide and uncertain.
“No case involved in the GAAR has yet come before the UK courts and it seems very premature for the government to be adding back bone to a weapon that has yet to be judicially tested.”
peter.walker@ft.com
