“Digital revolution” to tackle tax avoidance NYSE Post
The planned penalty for arrangements subject to the General Anti-Abuse Rule (GAAR) has now been formally set at 60% (in line with the amount proposed in consultation), and the anticipated introduction of rules addressing hybrid mismatch arrangements has been confirmed for 1 January 2017.
Civil penalties for those who enable offshore tax evasion will be introduce – including the public naming of those who have enable evasion.
Osborne added the government will make changes to the way the GAAR works to improve its ability to tackle marketed avoidance schemes.
In particular, the Chancellor said the money raised will go towards the targeting of disguised remuneration schemes and stamp duty avoidance.
When the GAAR rule was launched it was one of the government’s first and biggest moves in its battle against tax avoidance, but since its introduction in 2013 the body tasked with enforcing the rule has been distinctly quiet despite claims that companies and their accountants are perpetrating tax avoidance on an “industrial scale”.
The Transactions in Securities rules will be amended and a Targeted Anti-Avoidance Rule will be introduced to prevent opportunities for income to be converted into capital in order to gain a tax advantage.
The measures include a special reporting requirement and a surcharge on those whose latest return is inaccurate due to use of a defeated scheme, the names of such avoiders being published and, for those who persistently abuse reliefs, restrictions on accessing certain tax reliefs for a period.
He also said that capital gains tax would be required to be paid quicker and outlined up to £450m of savings from an overhaul to government digital services.
All individuals and businesses will be able to view their tax affairs in real time, providing them with greater certainty about the tax they owe. The government also plans to widen the “Promoters of Tax Avoidance Schemes” regime, by introducing more stringent punishments for promoters whose schemes are regularly defeated by HMRC. The penalty will be a way to claw back some of the money spent pursuing the serial avoiders.
