BudgetMar 8 2017

Tough new penalties for tax avoidance

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Tough new penalties for tax avoidance

The British government is to bring in new penalties on financial professionals who help people avoid tax, adding to the long list of measures which crackdown on those who fail to comply with the tax rules.

In his first Spring Budget, chancellor Philip Hammond revealed the UK now has the lowest tax gap in the world.

Despite this, he said there is still more work to be done, and announced a number of measures which aim to bring the gap down further, including a financial penalty for professionals who enable tax avoidance arrangements.

This rule applies to those tax cases which have been beaten by HM Revenue & Customs.

Mr Hammond also revealed plans to tackle abuse of foreign pension schemes, and to clampdown on businesses which convert capital losses into trading losses.

These measures are expected to raise £820m over the “forecast period”, he said.

The UK government has been embroiled in a longstanding battle for years against tax avoidance and evasion.

It has introduced a string of measures, including the introduction of accelerated payment notices, and the introduction of fresh powers to name and shame financial professionals who help clients avoid paying tax.

In summer last year, HM Treasury announced that advisers and accountants could face large fines by helping clients avoid paying tax.

katherine.denham@ft.com