Accountants face penalites for tax avoidance arrangements

Pat Sweet, CCH Daily


Tax authorities in the UK HMRC has released details of a consultation on proposals for sanctions for accountants and tax advisers who design, market or facilitate the use of tax avoidance arrangements which are later defeated in court and to change the way the existing penalty regime works for those whose tax returns are found to be inaccurate as a result of using such arrangements.

The move follows the announcement at Budget 2016 that it would be exploring further options to influence the behaviour of promoters and other intermediaries, including agents, Independent Financial Advisers (IFAs) and others in the supply chain.

Fines could be imposed on accountants who promote the schemes at 100% of the value of the unpaid tax as a result of using an aggressive, overt tax avoidance scheme, which is viewed is beyond acceptable tax planning by the government and HMRC.

The timing for the introduction of the new penalty scheme has not been set out although full details will be released at Budget 2017 next March, with a view to introducing the rules into legislation an upcoming Finance Bill. There are no estimates of the potential increase in revenue for the Exchequer with no estimates of the impact available although the consultation includes a draft implying that the scheme could take effect over the course of the 2017-18 tax year.