HMRC’s Action on High Risk Tax Avoidance Promoters
The tax avoidance promoters who do not comply with the tax rules will face financial penalties. HMRC has announced this with the intention to reduce the tax.
HMRC also made it clear to the high risk tax avoidance promoters that they must reveal to the clients about being monitored by the authority. Failing to do so can end up to a fine of £1 million.
In October 2014, HMRC achieved power to rule out for issuing conduct notices to high risk tax avoidance promoters for changing their ways.
Due to this, HMRC will issue even a harsh ‘monitoring notice' if the promoter does not comply with the terms of a conduct notice. This means the promoter will be named publicly by HMRC; and will have to tell their clients about being monitored.
David Gauke, Financial Secretary to the Treasury said "The government has taken unprecedented steps to clamp down on tax avoidance. Our tough new rules will force high risk promoters to change their behaviour and help protect taxpayers from unscrupulous advice. Promoters who do not change their ways should be in no doubt - HMRC is taking swift and decisive action to use these new rules."
The series of engagement in tax avoidance schemes by high-risk promoters and failing to meet the terms with DOTAS could end up with large penalties.
The rule made by HMRC is to let the promoters change their taxpayer ways and avoid repeated use of tax avoidance schemes. HMRC has already sent first conduct notice to a number of promoters to change their behaviour with the intention for improving their tax compliance. The issued notices are worth over £1 billion. They have also warned them about the outcomes if they don’t change their behaviour.
If you are also engaged in series of tax avoidance and are not paying the tax upfront, it is time you should. Otherwise, you will be charged with huge penalties. So, better do it earlier rather than being late.