New penalties for professional advisers who help their clients to evade tax come into force today, as part of a bid by the government to tackle abuses of the excise system.
Accountants, bankers, lawyers and other advisers can be fined by up to the value of the tax they helped their client evade, up to a maximum of £3,000. HMRC will also name and shame company involved.
The measure was first announced by then-chancellor George Osborne in 2015 and a consultation on the plan was launched in August, just weeks after Theresa May pledged during her leadership campaign to pursue companies over tax avoidance.
“It doesn’t matter to me whether you’re Amazon, Google or Starbucks: you have a duty to put something back, you have a debt to fellow citizens and you have a responsibility to pay your taxes,” she said at the time.
Accounting bodies warned during the consultation that the government needed to ensure the move did not prevent investors receiving impartial professional advice.
Jane Ellison, the financial secretary to the Treasury, said: “Tax evasion is a crime and as a government we have led reform of the international tax system to root it out. Closer to home we are creating a tax system where taxes are fair, competitive and paid.
“The raft of measures we have introduced to tackle avoidance and evasion will create a level playing field for the vast majority of people and businesses who play fair and pay what is due.”
This year will also see the creation of a new criminal offence for companies which fail to prevent the facilitation of tax evasion. The government is currently legislating for the measure, under which a company will be held liable if one of its employees or contractors facilitates tax evasion.
This strengthens the current rules in which prosecutors must prove that the company’s board of directors was aware of and involved in the facilitation.
Additionally the government is introducing a new requirement to declare historic tax evasion. Anyone who has not owned up to past evasion by 30 September 2018 could face new penalties.
The Treasury is also consulting on whether to introduce a new requirement on businesses and individuals with complex offshore financial arrangements to notify HMRC of them.
Since 2010 HMRC has brought in £130bn in its crackdown on tax evasion, tax avoidance and non-compliance.
Last year Mr Osborne unveiled plans to shut down disguised remuneration schemes such as employee benefit trusts and contractor loans, in a move the Treasury forecast at the time would raise £2.5bn over five years.
HMRC has also won a series of court victories against film investment schemes that attracted high-profile investors and were deemed to inflate their losses to maximise tax relief.
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