HMRC publishes consultation paper to tackle serial tax avoiders

HM Revenue and Customs (HMRC) has distributed a new consultation paper titled ‘Strengthening Sanctions for Tax Avoidance’, setting out proposals to tackle serial tax avoiders and tax avoidance schemes.

Penalties already exist for tax avoidance, but the new consultation proposes further financial punishments such as a surcharge and additional reporting requirements on users of multiple schemes that fail.

In addition, HMRC is considering the possibility of introducing further penalties for cases where the General Anti-Abuse Rule (GAAR) applies. The GAAR counters the most abusive tax avoidance.

The new Serial Avoiders Unit (SAU) in HMRC’s Counter-Avoidance Directorate is charged with identifying and dealing with users of multiple avoidance schemes.

The SAU will offer a hotline service to help those people who have used multiple schemes and want to get their tax affairs in order; providing them with a single point of contact to resolve their outstanding tax debts.

Jennie Granger, director general, enforcement and compliance, HMRC, said: “HMRC is determined to clamp down on the small number of people who engage in tax avoidance.

“As part of this, HMRC is increasing its focus on users of multiple schemes and increasing the level of resource and intensity devoted to tackling these avoiders.

“I would strongly encourage people to get in touch to settle their affairs and put the past behind them.”

David Gauke, financial secretary to the Treasury, believes HMRC’s message to serial tax avoiders is simple: “start paying your fair share”.

“The Government introduced the Accelerated Payments regime last year to fundamentally reduce the incentive to engage in tax avoidance,” said Gauke.

“HMRC has already issued notices worth over £1 billion, requiring avoidance scheme users to pay their tax upfront, lake the vast majority of taxpayers.

“Today, we are proposing further action, such as penalties, to tackle the small hard-core group of people who repeatedly use avoidance schemes.

“Our message is clear: it is time to get out of avoidance and start paying your fair share.”

Last updated: 2nd February 2015