Advisers have expressed reservations about proposed plans to fine them if they help clients avoid paying tax.
New proposals could mean advisers have to pay a penalty of up to 100 per cent of the tax owed to HM Revenue & Customs, the financial secretary to the Treasury Jane Ellison announced today (17 August).
The move would affect advisers, tax planners and accountants involved in schemes - including those offshore - which are proven in court to be a tax avoidance arrangement.
One of the main concerns expressed by advisers was that tax avoidance falls into a grey area.
Jason Witcombe, director of London-based Evolve Financial Planning, said: “In principal this could be a good idea but I guess there is a bit of a grey area around what is considered sensible tax planning and what is considered tax avoidance.
“I don’t think anyone would be questioned about putting something into an Isa but what about offshore bonds?”
Kevin Morgan, managing director of Hertfordshire-based Consilium Financial Planning, said the proposals were “silly”.
He said: “Politicians are there to make sure the law is clear and if there is any ambiguity in it, that will be exposed.”
Andrew Whiteley, director at Hertfordshire-based Provisio Wealth Management, said: “Without any clarification on what is considered avoidance that’s acceptable and avoidance that is unacceptable it is impossible to know whether this is good or not.”
But some advisers were more enthusiastic about the proposals, saying it should be clear when a scheme is likely to fall foul of the taxman.
Richard Ross, director of Norfolk-based Chadwicks, said: “Too much time and energy is wasted doing esoteric tax planning.
“A good adviser will be able to use the rules as they are intended by Parliament to reduce their client’s tax.
“We all know whether we are going over the line or not. People who are doing this know they are pushing the boundaries.”
Meanwhile Trystan Lewis, chartered financial planner at Cheshire-based Griffin Wealth Management, said: “We need a deterant and if there is anything that’s border line then advises should seek futher clarification from HMRC.”
