So far “fewer than five” firms have been sent letters, however, more are expected to receive the notifications containing “clear warnings” as HMRC continues to clampdown on avoidance schemes.
In a HMRC stakeholder conference held early this week, the financial secretary to the Treasury, David Gauke, said the guidelines, which were introduced in the Finance Act 2014 yesterday, aim to tackle “the small minority of unscrupulous promoters that are persistently uncooperative and are not transparent in their dealings with HMRC”.
“Unprecedented steps”
He said: “The government has taken unprecedented steps to clamp down on the selfish minority who practise tax avoidance, because we are firmly on the side of the vast majority of taxpayers who play by the rules. As a result, tax avoidance is now very high risk.
“On top of a substantial fee to join a scheme that will almost certainly fail a challenge by HMRC, tax avoiders will also have to pay the tax they dodged, plus interest and penalties.”
The new rules mean firms will be forced to make their status as a high-risk promoter clear in all of their publications and correspondence.
The legislation specifies that businesses which breach the conditions will be subject to a more stringent regime in which they will be closely monitored, made to hand over product and client information, and could be forced to pay as much as £1m.
HMRC said: “The new rules allow HMRC to identify, monitor and ultimately badge promoters that taxpayers may wish to steer clear of.”
“Straight to the source”
Head of technical marketing at Old Mutual Wealth, Rachael Griffin, said: “I’m supportive of the Revenue’s powers and supportive of the fact the HMRC are exercising those powers, providing it’s targeting the smaller minority, as opposed to the legitimate mainstream tax planning schemes that people can use.
“These new rules mean that if the Revenue are concerned about these schemes then they have got those direct powers to tackle them by going straight to the source. But it’s two-fold in that they are trying to be helpful from a clients’ perspective as well.”
The tax authority’s crackdown on tax avoidance has seen a reduction in the number of schemes from 116 in 2009/10 to 28 in 2013/14.
