HMRC is cracking down on tax avoidance
30 March 2016
HMRC is cracking down on tax avoidance and have various tools that can help you spot the signs of avoidance and advise your clients on the risks involved in using tax avoidance schemes.
These risks have increased greatly in the last two years, with the introduction of new legislation to combat avoidance. You need to ensure that you are able to explain these risks fully to your clients, alongside their obligations.
There are a number of avoidance schemes and arrangements being marketed to individuals and businesses as legitimate tax planning. This can give potential users the false reassurance that HMRC will not challenge their use of the scheme. Such schemes are often marketed as wealth management products, or dressed up as exciting investment opportunities.
If you think one of your clients may be tempted by tax avoidance, please encourage them to look at the following pages of GOV.UK which contain HMRC’s latest information on tax avoidance, set out in simple and straightforward terms:
- Ten things about tax avoidance series gives customers the plain facts about specific areas of tax avoidance in simple terms – see the recently published Ten Things about contractor loan schemes
- Tax avoidance schemes currently in the spotlight gives tax agents and their clients the latest information on schemes that HMRC believes are being widely offered to help those using them to avoid tax – see the recently published Spotlight 29: don’t fall for it – misleading claims by tax avoidance scheme promoters
- Tempted by tax avoidance gives advice on how to spot a tax avoidance scheme.
There is a new obligation on employers to report to HMRC information about employees where the employers has implemented a DOTAS, disclosure of tax avoidance scheme, which benefits either their employees or themselves and is related to the employment of those employees. The employer must submit details about each employee in relation to whose employment the scheme operates by 19 April following the end of the tax year.
The new requirement relates to tax year 2015/16 onwards irrespective of when the scheme was first entered into. Further information is available here.