New Penalties for Enablers of Offshore Tax Evasion

[AtW]

Which creates the question about whether HMRC should be applying the resources and retrospective law to the likes of the multinationals who pick a tax figure that they think their shareholders will accept and pay that.

They should, but they won't

[webberg]

Which creates the question about whether HMRC should be applying the resources and retrospective law to the likes of the multinationals who pick a tax figure that they think their shareholders will accept and pay that.

[AtW]

The objective for HMRC is to deal with mass market schemes - they need very strong deterrence effect for decades to come, bankrupting 40000 people is a no brainer for them, who is going to feel sorry for tax avoiders who entered schemes with full knowledge that tax will be reduced?

Now if they were missold stuff and were under impression that tax was paid, but inreality it was pocketed by organisers, then it would be different matter, at least from public support point of view.

The amount is almost irrelevant - 2 bln or 1 bln or even 0 bln - they fight to the death now to prevent future tax from being eroded.

[webberg]

There is perhaps a distinction to be made between motives for entering tax planning.

Where a scheme has been studied by a financially astute person, willing to risk a bonus or funds that are not used for daily living expenses, knowing that there are a number of risks and where perhaps he/she is advised by a crew of experienced and expensive lawyers etc, and this fails, I can see a good argument for advisers and users to be tagged and bagged.

Where a mass marketed scheme has been used by those whose skills are outside finance and tax and who are entitled to believe the advertising included in the materials and draw some comfort that many of their colleagues have used the arrangement and HMRC has been silent, I can see a less good argument.

In reality the above represent two ends of a line and suffer from being hopelessly optimistic and simple. There are many shades between them.

Unfortunately HMRC use the first to justify draconian, 20 year retrospective law for the second.

That is not only damaging to the trust that investors could have when thinking about investing in the UK but also deeply unfair. I suggest that such cavalier disregard of their own charter and purpose will damage the integrity of HMRC for generations. That lack of trust in an organisation we should regard as setting the highest principles of integrity will poison not only those caught in the mess now, but their children and beyond.

And for what?

HMRC claim that 40,000 people are impacted by the 2019 charge. The value they think these people owe them, varies according to whom HMRC is speaking. Let's be generous and say £2bn. That's £50,000 each.

Our analysis (backed by a research exercise from an independent firm) says that HMRC would be fortunate if they collected 50% of that for a variety of reasons. So we're at £25,000 each.

I wonder if HMRC offered everybody here a chance to pay 50% of their preposterous demands base on flawed logic, and walk away, if they would actually collect something from say 75% of the population?

Instead HMRC insist on dragging everybody through and expensive and ultimately pointless exercise. Moreover an exercise that has effects way beyond money. How many people here have health issues that can be traced to the stress and anxiety? How many have made job choices based on that flawed logic? How many have had their futures ruined?

I agree that some advisers have profited enormously from some truly awful schemes. Why then not make the law here retrospective?

I disagree that individuals should not be entitled to rely upon expert opinion.

This is sadly though another example of HMRC actually catching up with real life a decade late and blaming everybody else.

[centurian]

It did seem to me that this was case on the wording I think I raised it on here. It causes a conflict of interest and adds to the muddle.

What's the conflict of interest ?

It appears to align the interests of the scheme user and the scheme provider/adviser. They are now both on the hook if it fails.

[AtW]

What is worrying here is that the penalty is said to apply to any planning that is deemed to have "failed".

Apparently failed can include reaching a settlement!

Unbelievable.

It's a logical outcome from lots of court actions aimed to delay the inevitable - now people who make money on it will also be risking losing it, suddenly stalling everything for years isn't such a great strategy.

[QCApproved]

What is worrying here is that the penalty is said to apply to any planning that is deemed to have "failed".

Apparently failed can include reaching a settlement!

Unbelievable.

It did seem to me that this was case on the wording I think I raised it on here. It causes a conflict of interest and adds to the muddle.

[webberg]

What is worrying here is that the penalty is said to apply to any planning that is deemed to have "failed".

Apparently failed can include reaching a settlement!

Unbelievable.

[AtW]

Draft "consultation" was for failed tax avoidance schemes, they probably decided to play it safe for now and use it for "evasion" since nobody could possibly object that.

In fact I reckon this is ground work to roll "aggressive tax avoidance" into evasion category.

[QCApproved]

Agreed it would be equitable for their to be a retrospective element in keeping with that meted out to the taxpayer.
Perhaps because a lot of them were HMRC inspectors they have a privileged status

[NotAllThere]

Tax evasion is criminal.
Tax avoidance is legal.

This legislation won't be able to do anything to the tax avoidance promoters and accountants.
If someone was promoting and committing tax evasion they would be sent to jail...

Next step. Penalties for enablers of failed tax-avoidance schemes. Retrospectively, natch. With ability to peer through the corporate veil.

[LondonManc]

Good. Tax evasion is far more important than tax avoidance (which you could also call tax minimalisation by legal means). Anything that involves offshore vehicles (at all levels of society, including Mr Branson and co) should be investigated as a priority. We need to keep as much money as possible that is earned in the UK within the UK.

[Whysoserious]

Tax evasion is criminal.
Tax avoidance is legal.

This legislation won't be able to do anything to the tax avoidance promoters and accountants.
If someone was promoting and committing tax evasion they would be sent to jail.

HMRC are actively trying to blur the lines between avoidance and evasion.
The law however will always distinguish between the two and therefore this legislation is toothless.

[eazy]

New penalties for enablers of offshore tax evasion

https://www.gov.uk/government/news/n...re-tax-evasion

HMRC has introduced new sanctions from the 1 January 2017 against accountants, tax advisers and lawyers who enable offshore tax evasion. The new penalties, first announced in last year, allows HMRC to charge civil penalties on the facilitators of the tax evasion who provide planning, advice or other professional services or physically move funds offshore.

Announcing the new penalties, Jane Ellison, the financial secretary, said: “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.