Weekly Tax Update - Monday 19 August 2013

1 General news

1.1 Raising the stakes on tax avoidance

HMRC has published a consultation paper in which it proposes a new set of obligations for high-risk promoters, their intermediaries and users and aims to encourage users of avoidance schemes to settle their tax affairs after similar cases have lost in court or tribunal.

The executive summary is copied below:

1.1 This consultation document covers a number of issues relating to the promotion and use of avoidance schemes, namely:

forcing high-risk promoters of avoidance schemes to provide details of their products to HMRC using suitable information powers and penalties; ensuring that users of high-risk promoters' schemes appreciate the risks they are running and understand the consequences; raising the standard of reasonable excuse and reasonable care for high-risk promoters and the users of their avoidance schemes; encouraging users of avoidance schemes to settle their tax affairs after similar cases have lost in court; and amending the Disclosure of Tax Avoidance Schemes (DOTAS) regime to make sure the right information gets to HMRC at the right time. 1.2 Chapter 2 sets out the background to this consultation and the genesis of HMRC's strategy for high-risk promoters.

1.3 Chapter 3 describes two possible approaches to the identification of high-risk promoters and proposes an administrative process for the high-risk promoter regime.

1.4 Chapter 4 sets out what consequences will apply to high-risk promoters, including new information requirements, penalties and a proposal for naming high-risk promoters. In this chapter are details of proposed higher standards for the defences of reasonable excuse and reasonable care for high-risk promoters and users of their schemes. It also contains proposals for new information powers for the intermediaries of high-risk promoters and users of their avoidance schemes.

1.5 Chapter 5 sets out how a new regime for follower cases could be used to encourage people who have used an avoidance scheme to settle their tax affairs once the scheme is defeated in the courts.

1.6 Chapter 6 proposes a change to the information to be provided under DOTAS so that HMRC has sufficient information when examining a disclosed scheme.

1.7 Chapter 7 provides an update on the work done by HMRC on mis-selling to date.

1.8 This consultation corresponds to Stages 1 and 2 of the Government's Tax Consultation framework. Any changes to legislation in the light of this consultation and...

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