Exchequer
Secretary to the Treasury, David Gauke has today announced
Government proposals to crack down on the promoters of contrived
and aggressive tax avoidance schemes.
Speaking at Policy Exchange this morning, the minister unveiled
plans to increase the pressure on advisers who market abusive
schemes that artificially and aggressively reduce tax and to make
it easier for taxpayers to identify such schemes.
The proposals include making the Disclosure of Tax Avoidance
Schemes (DOTAS) rules an even stronger and more effective weapon
in the battle against tax avoidance, for example by giving HMRC
stronger powers to force promoters to tell them about avoidance
schemes and who is using them, and tightening the rules so that it
is easier to impose penalties for failure to provide information
to HMRC about a scheme.
The Government is also looking at publishing warnings about tax
avoidance schemes that are effectively being mis-sold and making
it easier for taxpayers to identify when they are on the receiving
end of a hard sell by a less reputable promoter.
David Gauke said: “Some might say that
consultation documents on tax administration are an effective cure
for insomnia, but this is one that will keep the promoters of
aggressive tax avoidance schemes awake at night.
“We are building on the work we have already done to make life
difficult for those who artificially and aggressively reduce their
tax bill. These schemes damage our ability to fund public services
and provide support to those who need it. They harm businesses by
distorting competition. They damage public confidence. And they
undermine the actions of the vast majority of taxpayers, who pay
more in tax as a consequence of others enjoying a free ride.
“The Disclosure of Tax Avoidance Schemes regime (DOTAS) has
assisted HMRC greatly over the years, closing off around £12.5bn
in avoidance opportunities. But as the avoidance landscape
changes, so must it. The major reforms to the system we consult on
today can, informed by responses, place DOTAS once again at the
forefront of anti avoidance measures globally.”
Notes for Editors
1. The full speech, Where next for tackling tax avoidance?, can
be found at http://www.hm-treasury.gov.uk/speech_xst_2012_index.htm
2. The Government is strongly committed to tackling tax avoidance
and, as part of its new approach to tax policy making set out
proposals for a more strategic approach to the risk of avoidance,
Tackling Tax Avoidance.
3. At Budget 2012, the Government announced a range of
anti-avoidance measures which together will bring in around £1
billion and protect a further £10 billion in future revenues from
the tax avoidance ‘industry’ over the next five years.
4. Over the past year the Government has made the following
announcements of changes in tax law to counter avoidance:
• 9 March 2011 it acted to tackle an aggressive tax avoidance
scheme that depended on machinery long funding leases and aimed to
claim tax relief twice on a single expenditure
• 6 April 2011 it acted to prevent individuals from taking
advantage of a tax loophole in the double taxation arrangements
• 12 August 2011 it acted to counter a marketed avoidance scheme
designed to accelerate capital allowances claims, obtaining
advantageous and artificial early tax relief;
• 15 September 2011 it acted to close a disclosed scheme using
Manufactured Overseas Dividends (MODs) to get a repayment or set
off on income tax that the UK Exchequer never receives;
• 6 December 2011 it acted to block an avoidance scheme that
enabled companies to enter a one-way bet against the Exchequer
using foreign currency share capital;
• 12 January 2012 it acted to counter a personal tax avoidance
scheme involving post-cessation trade relief;
• 13 March 2012 – the Government acted to counter avoidance
involving losses from a property business set against general income
• Budget 2012 announced action to tackle Stamp Duty Land Tax
(SDLT) avoidance
• Budget 2012 announced action to introduce a General
Anti-Avoidance Rules (GAAR).
• 10 May 2012 it acted to counter avoidance and protect revenue
to guard against potential artificial avoidance of VAT though the
use of face value vouchers.
5. Between the introduction of DOTAS in 2004 and the end of March
2012, a total of 2,289 avoidance schemes were disclosed to HMRC
under the rules. This has led to over 60 changes in tax law to
stop avoidance, and avoidance schemes potentially costing the
country billions of pounds have been closed down.
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Notes to Editors
.
Contacts:
HM Treasury Press Release
GlideBouncebacks@HMTreasury.gsi.gov.uk