High noon for high risk tax schemes
HMRC have issued a consultation document to counter the continued marketing and use of high risk tax avoidance schemes. The document - "High Risk Tax Avoidance Schemes" - proposes to list tax avoidance schemes that are unlikely to deliver the tax savings claimed. Taxpayers who use these schemes currently benefit from deferring the disputed tax payment until HMRC has completed an investigation.
The proposals outlined in the document would require users of a listed scheme to disclose the scheme to HMRC. They would also be subject to an additional charge on underpaid tax. Taxpayers would be able to protect themselves from the additional charge by paying tax in dispute up-front.
HMRC clearly isn't happy at losing revenue to highly aggressive and artificial tax avoidance schemes. The proposals were announced in the Budget, which, at the same time, published 'Tackling Tax Avoidance' which sets out the Government's strategic approach to avoidance.
The consultation can be found at http://www.hmrc.gov.uk/consultations and will run from 31 May 2011 to 31 August 2011.
This was first published in June 2011