The new Finance Bill has proposed the possibility of landing tax advisers with fines of up to £1 million if they actively promote tax avoidance and evasion schemes.
Under the new plans, HMRC will require that tax planning and advisory services provide interested parties with an alert that they are being monitored when visiting their websites. They will also be required to provide clients with a promoter reference number which will need to be displayed on documents such as tax returns.
Any promoters of tax avoidance schemes who do not follow the new rules will be subject to fines of up to £1 million. Legal advisers and accountants will also be subject to the rules if they are found to be non-compliant and involved in the promotion of tax avoidance.
The proposals come amid the recent controversy of alleged tax avoidance schemes such as those promoted by Ingenious Media and Liberty which are among a number of cases currently being threatened with HMRC investigation and paying millions of pounds in fines.
Ray McCann, a partner at law firm Pinsent Masons, said: “These rules will very publicly stigmatise these tax advisers and mean that they will struggle to win clients and carry on in business.”
A spokesperson for HMRC commented: “The High Risk Promoters legislation that has achieved Royal Assent enables HMRC to categorise and engage with promoters who have breached objective threshold conditions and gives them the opportunity to improve their behaviour.”