HMRC are writing to all agents about the Serial Tax Avoidance Legislation which is effective from 15 September 2016.
If you have represented one or more clients who are being investigated because they have used a Tax Avoidance scheme you receive this letter which gives you some main points of the Serial Tax Avoidance Legislation, in order to assist you giving the best possible advice to your clients (or so they say).
We have of course been advised by our professional bodies as to what points we should look out for but it is useful for future clients that they understand that HMRC are seeking to put agents under pressure to cooperate with HMRC – as they should indeed – to ensure that matters are being dealt with properly.
We have no criticism of that but it is useful to know and to advise clients of that information.
For instance, the main points are as follows:-
1) Clients who are in a scheme that is defeated (not all schemes have been defeated for instance and there are lots more to be investigated) it says on or after 6 April 2017 will:
- Receive a warning notice
- Enter a five year warning period, during which they must give HMRC annual reports of their use of avoidance schemes.
2) Clients who enter into tax avoidance schemes on or after 15 September 2016 and go on to use those schemes during a warning period may:
- Have to pay a surcharge of up to 60% of the tax due (that is, the ‘understated tax’)
- Be publicly named as a serial tax avoider
- Have their access to tax reliefs restricted.
The letter goes on to say you and your clients can act now to make sure that existing schemes entered into before 15 September 2016 are not affected by the Serial Tax Avoidance Legislation. You can do this by taking one of the following actions:
- Work with us so that we can agree your clients use of the scheme before 06 April 2017 (not much time left)
- Fully disclose details of the scheme to us before 06 April 2017 (repeat – not much time)
- Tell us before 06 April 2017 that you’ll fully disclose details of the scheme to us, and then do so within the time limit we set (which can be after 06 April 2017) – useful.
They quote further information can be obtained from factsheet CC/FS38 and you can find the Serial Tax Avoidance Legislation under Schedule 18 of the Finance Act 2016.
This is well worth reading and easily retrieved online. We have attached a copy of this Compliance Check so you can read it in conjunction with this. I’m always annoyed at being referred to another reference number which one has to go on to in order to understand exactly what the importance of the letter one is reading. Sometimes you put it off by saying, I’ll go to it later, when really you need to be able to read it within that particular letter.
So, there you are. Now you know how things are moving with regards to the various schemes you may have entered into or not.
Of course, KinsellaTax is always here to help you and assist in any way they are able.
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