“The Chancellor announced a package of anti-avoidance and evasion measures will be released tomorrow which reflects a direction of travel that has been well signalled over the current Parliament.
“New announcements include “tougher measures” for serial avoiders – those who use tax avoidance schemes year after year – who now face additional administrative and financial measures. Whether these can be made to work properly in practice remains to be seen. The Consultation Document in January was thin on detail and it is not obvious how HMRC will be able to handle the long delays between an avoidance transaction and the outcome of enquiries and litigation that finally determines whether it fails.
“The early closure of the current disclosure facilities is a shrewd move by the Chancellor, ramping up the pressure on those with skeletons in their cupboards. They will need to fess up early as the penalty will increase next year, and after that HMRC will have new sources of information, which they will doubtless hope to use to impose much higher penalties. HMRC presumably intends to prosecute a significant proportion of cases, given the hint that there is a further announcement to follow concerning a new criminal offence of tax evasion (and penalties for those who assist them).
“The other changes to the way existing anti-avoidance measures work (known as the DOTAS and POTAS rules) and the introduction of penalties for General Anti Abuse Rule (GAAR) cases have been signalled previously. They should help HMRC respond more effectively without adversely affecting reputable taxpayers and advisors.”
Notes to editors:
DOTAS: Disclosure of Tax Avoidance Schemes
POTAS: Promoter of Tax Avoidance Schemes
Angela Pink, Communications Executive
KPMG Press Office: +44 (0)207 694 8773
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