Policy paper

Strengthening sanctions and deterrents for tax avoidance

This tax information and impact note introduces a new penalty on individuals or entities who enable the use of tax avoidance arrangements.

Documents

Details

The measure will introduce a new penalty on those individuals or entities who enable the use of tax avoidance arrangements which HM Revenue and Customs (HMRC) later defeats (‘enablers’).

The vast majority of professionals who provide clients with advice on genuine commercial arrangements will not be impacted.

The measure will also provide clarification as to what is considered to constitute ‘reasonable care’ in relation to the application of the penalties charged on taxpayers following the defeat of tax avoidance arrangements. This will prevent tax avoiders from relying on non independent advice to demonstrate that they took reasonable care to avoid inaccuracies in their tax returns arising from their use of tax avoidance arrangements which have been defeated by HMRC.

Published 5 December 2016