HM Revenue & Customs (HMRC) was busy in August publishing consultation papers on tax avoidance and tax evasion.
New PM Theresa May announced in her final speech to the Conservative Party Conference:
“So it doesn’t matter to me who you are. If you’re a tax-dodger, we’re coming after you. If you’re an accountant, a financial adviser or a middleman who helps people to avoid what they owe to society, we’re coming after you too.
An economy that works for everyone is one where everyone plays by the same rules. So whoever you are you – however rich or powerful – you have a duty to pay your tax. And we’re going to make sure you do.”
Three months earlier HMRC had started two separate consultations on tackling promoters of tax avoidance schemes and dealing with offshore tax evasion.
The attack on promoters – and others involved in the development, sale and use of schemes – is designed to “influence behaviour”. That “influence” will take the form of new penalties on the promoters and their associates if a scheme fails, based upon the amount of tax that was purportedly avoided by the scheme’s users.
The latest move against offshore evasion proposes a “Requirement to Correct” should you have “undeclared UK tax liabilities in respect of an offshore matter”.
The “correction” must be made by September 2018, after which a Common Reporting Standard (CRS) should come into force. Under the CRS, over 100 countries will automatically exchange taxpayer information, making evasion more difficult and dangerous.
HMRC is adopting a carrot and stick approach here because it would prefer tax evaders to confess voluntarily rather than after an investigation. Thus the pre-CRS tax penalties will generally be lower than those under the “Failure to Correct” regime that begins in October 2018.
The targets for these consultations have nothing to do with what might be described as triedand-tested financial planning and advice, such as we offer.
The Prime Minister and HMRC are after aggressive avoidance schemes and tax evasion – which have always been illegal.
Call on 01273 774855 or email email@example.com
Tax laws can change. The Financial Conduct Authority does not regulate tax advice.
Also inside our latest Pembroke Winter Newsletter:
- Does pension beat property?
- Finding income in a tricky savings climate
- LISA reappears after a summer redesign
- Is your family financially protected?
- What is a £5,000 a year pension worth?
- A third quarter investment lesson