Aggressive tax planning - will #AS2014 affect you?

Strengthening civil deterrents for offshore tax evasion are among a host of measures to tackle “aggressive tax planning” unveiled in the 2014 Autumn Statement.

The government aims to tackle offshore tax dodgers by amending existing offshore penalties to include inheritance tax and apply to domestic offences where the proceeds of non-compliance are hidden offshore.

George Osborne also announced plans to update the territory classification system to reflect the jurisdictions that adopt the new global standard of automatic tax information exchange; and include a new aggravated penalty of up to a further 50 per cent for moving hidden funds to evade international tax transparency agreements.

Article continues after advert

The Tory MP also revealed plans to strengthen the Disclosure of Tax Avoidance Schemes, including the establishment of a taskforce; and has pledged to publish information on tax avoidance promoters and schemes that are notified under the current regime.

HMRC will review how best to enhance the incentive countries and jurisdictions to disclose information on offshore tax evaders.

In addition, there will be an increase to the remittance charge for non-domiciles who have been resident in the UK for 12 of the past 14 years, and introduce a new charging point for those who have been resident for 17 of the past 20 years.

The government will consult on making the election to pay the remittance basis charge apply for a minimum of three years, so that non-domicles are not easily able to arrange their tax affairs so as to only pay the charges occasionally.

From today, the governemnt will implement anti-avoidance rules to counter the avoidance of income tax through miscellaneous loss relief. It will also limit the miscellaneous income against which a miscellaneous loss can be claimed from April 6 2015.

There are also plans to introduce legislation to ensure that sums which arise to investment fund managers for their services are charged to income tax from the same date next year.

The government will legislate to remove the tax advantage offered to additional and higher rate taxpayers by special purpose schemes - which allows shareholders to remove receive their ‘dividend’ so that it is taxed at preferential rates.

HMRC will also consult, in early 2015, on introducing further deterrents for serial avoiders and on penalties for tax avoidance cases where the General Anti-Abuse Rule applies.

Tom Dean, chartered financial planner at Plutus Wealth Management LLP said: “Tax avoidance is morally reprehensible and results in people questioning legitimate tax planning mitigation strategies.

“The measures will not change they way we interact with our clients because we only stick with legitimate measures and completely avoid questionable tax-saving practices.”