HM Treasury has set out a series of proposals for how it could discourage people from using tax avoidance schemes.
In a consultation published yesterday, the Treasury said users of these schemes are faced with choices which avoidance “enablers” and the government would like to influence.
It has said it would like to increase the transparency of tax arrangements and awareness of the risks involved.
This could involve requiring the promoter of a tax avoidance scheme to provide HM Revenue & Customs with a list of all those the scheme is being marketed to so it can send them warnings and alerts.
It could also mean forcing those marketing avoidance schemes to tell their client who the scheme is being marketed for and how much they are being paid to sign people up.
In the consultation the Treasury said: “Typically, it is in the enablers’ interests for the user to persist with their arrangements come what may and to avoid direct engagement with HMRC: they will frequently seek to hide the true consequences and likelihood of defeat from the user to hold onto monies invested and/or maintain a flow of fees.
“As such, the government is especially interested to increase the transparency of tax arrangements, and awareness of the risks involved.”
Arrangements that generate a tax advantage in a way that could be avoidance should be notified to HMRC as early as possible, the statement read.
“At each stage thereafter, the government would like to ensure that those implementing the arrangements face clear choices and consequences for proceeding.”
Another proposal was requiring promoters to provide their clients with HMRC information on the risks of avoidance alongside marketing material.
The Treasury is also looking into a requirement on promoters to provide HMRC with a full client list if it makes an enquiries in some circumstances.
