HM Revenue & Customs has extended the time limit for providers of tax avoidance schemes to provide information about their customers.
Promoters of tax avoidance schemes must inform HMRC about their client’s national insurance numbers and unique taxpayer reference.
From 1 January 2011 promoters of tax avoidance schemes were required to provide quarterly lists to HMRC of clients to whom they have become obliged to issue a scheme reference number during that calendar quarter.
The lists apply to schemes disclosed at any time.
If a scheme was disclosed before 1 January 2011 a promoter will have to provide a client list in respect of any clients to whom he is required to issue a scheme reference number on or after that date.
The promoter will not have to provide a client list in respect of any clients to whom he was required to issue a scheme reference number before 1 January 2011 (even if he actually issues them with a scheme reference number on or after that date).
HMRC uses the information from client lists to assess and monitor the level of risk posed by disclosed tax avoidance arrangements.
The tax office has also clarified what happens if clients decide to pull out of a tax avoidance scheme.
A client may take the first step and enter into an arrangement, but later withdraw from, or unwind, it so that no tax advantage is obtained.
Even where this occurs within the same calendar quarter, HMRC stated the promoter is still obliged to include the client on the client list.
HMRC argued this was because the trigger for inclusion on the client list is the same as for the scheme reference number notification obligation.