Headline:
HMRC seeks extra powers over examining tax reduction plans
Description:
HMRC is seeking new powers to force taxpayers to reveal details of any arrangements they make to reduce tax, accountants have revealed.
UHY Hacker Young said under new draft legislation failure to provide details of tax plans to the Revenue on request could attract a £5,000 fine and daily penalties of £600. Harsher charges could follow if plans are then not officially registered with HMRC, it added.
The firm said the proposed powers would mark a "radical departure" from existing disclosure rules under which tax plans only have to be disclosed if they meet certain criteria. HMRC cannot currently examine plans which are not voluntarily disclosed.
UHY claimed that the criteria according to which schemes should be disclosed to HMRC lack clarity and appear to catch many common commercial transactions where the primary motivation is not to obtain a tax advantage.
Roy Maugham, Tax Partner, at UHY Hacker Young, comments: "These are radical proposals. The days when taxpayers could keep their tax affairs confidential are effectively over."
"HMRC will be able to scrutinise any tax planning arrangement it likes in detail. This could make it much easier for the Government to introduce new tax law to specifically attack popular and perfectly legitimate plans to save tax.
"HMRC is constantly chipping away at the principle that limiting the amount of tax you pay is a legitimate activity. Having introduced specific tax reliefs, like gift aid payments, it then seeks to restrict their application."
source:accountingweb
UHY Hacker Young said under new draft legislation failure to provide details of tax plans to the Revenue on request could attract a £5,000 fine and daily penalties of £600. Harsher charges could follow if plans are then not officially registered with HMRC, it added.
The firm said the proposed powers would mark a "radical departure" from existing disclosure rules under which tax plans only have to be disclosed if they meet certain criteria. HMRC cannot currently examine plans which are not voluntarily disclosed.
UHY claimed that the criteria according to which schemes should be disclosed to HMRC lack clarity and appear to catch many common commercial transactions where the primary motivation is not to obtain a tax advantage.
Roy Maugham, Tax Partner, at UHY Hacker Young, comments: "These are radical proposals. The days when taxpayers could keep their tax affairs confidential are effectively over."
"HMRC will be able to scrutinise any tax planning arrangement it likes in detail. This could make it much easier for the Government to introduce new tax law to specifically attack popular and perfectly legitimate plans to save tax.
"HMRC is constantly chipping away at the principle that limiting the amount of tax you pay is a legitimate activity. Having introduced specific tax reliefs, like gift aid payments, it then seeks to restrict their application."
source:accountingweb
Date:
10.01.2007
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