Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Law Society : City firms keeping close eye on HMRC consultation

09/30/2016 | 09:18am EDT

City firms with tax departments will be paying close attention to the HMRC consultation: Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document.

The most contentious proposal is to introduce sanctions for advisers who design, market or facilitate the use of tax avoidance arrangements which are subsequently 'defeated' by HMRC. Arrangements are defeated either by a decision of the court or otherwise by agreement with HMRC.

The aim is to influence the behaviour of promoters and other advisers in what HMRC calls 'the supply chain'. Fines could be imposed on advisers who 'promote' schemes which are subsequently viewed as aggressive tax avoidance schemes beyond what is deemed acceptable tax planning.

Advisers are described as 'enablers' of tax avoidance, without whom the scheme could not be implemented. This embraces a wide range of advice, including legal advice.

For the first time, advisers would be subject to penalties, in addition to the end-user of the arrangements, which it is proposed could amount to 100 per cent of the financial benefit received by an enabler, or could be based on 100 per cent of the total tax that the end-user has saved through the scheme. These amounts could be very significant, so there might be a cap says HMRC.

When it comes to a defence, HMRC is proposing legislation which would place the burden on the taxpayer and the enabler to show that they have taken reasonable care, rather than HMRC having to demonstrate that they have failed to take reasonable care.

There will be obvious difficulties for legal advisers who could be prevented from demonstrating that they were not enablers if they are not permitted to waive legal professional privilege over their advice concerning a defeated scheme (and it might be difficult to see why a client would waive privilege).

The definitions in the consultation are so wide-ranging that there are implications for a citizen's or business's right to get advice on their tax liability - and it is surely in the HMRC's interest for taxpayers to be able to get professional advice.

For their part, lawyers must be free to give advice on the law as it stands at the time, without having to fear that advice subsequently being called into question - and attracting penalties - by a court decision that could arise several years later. There are reports that insurers are looking at this risk very warily.

The Law Society's Tax Law Committee has met HMRC officials to discuss these and other implications. The proposals are the subject of consultation, and affected firms may wish to respond: the closing date is 12 October.

The Law Society published this content on 30 September 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 30 September 2016 13:18:06 UTC.

© Publicnow 2016
Latest news "Economy & Forex"
09:36aWall Street opens higher as mega-cap stocks rise
09:36aWORLD BANK  : An uneven global economic recovery in 2021 promises to invert a longstanding principle of success and failure
09:35aCanada Loses 207,000 Jobs in April, Unemployment Rate Climbs to 8.1% -- Update
09:29aINTERGLOBE AVIATION  : Indian airlines risk consolidation, plane repossessions amid COVID-19 surge
09:28aAsian Development Bank to end coal, oil and gas financing - draft statement
09:26aU S DEPARTMENT OF TREASURY  : Secretary Yellen Announces Intention to Appoint Michael J. Hsu as First Deputy Comptroller of the Office of the Comptroller of the Currency
09:22aINSTANT VIEW : U.S. April payrolls gain much smaller than expected
09:20aNORWEGIAN PETROLEUM DIRECTORATE  : The petroleum industry represents jobs for the future
09:12aAIG says will use IPO to sell life and retirement unit
09:05aGreensill UK administrators say have collected $3.7 billion so far
Latest news "Economy & Forex"