HMRC has published a detailed technical guidance note on the serial tax avoidance legislation, which introduces a range of new sanctions for taxpayers who use tax avoidance schemes that HMRC later defeats in a court or tribunal.
The guidance makes clear that the legislation applies not just to persistent avoiders, but also to taxpayers who have used only one avoidance arrangement that has been defeated. The legislation, introduced by Finance Act 2016, Sch 18, will affect all new avoidance arrangements entered into on or after 15 September 2016 and defeated after that date. It may also affect existing avoidance arrangements entered into before 15 September 2016, where they are defeated after 5 April 2017.
On a relevant defeat of an avoidance arrangement, HMRC will have 90 days to issue a warning notice, requiring the taxpayer to submit information annually during the warning period. Further sanctions include penalties, naming, and restrictions on access to certain direct tax reliefs.
The penalty for a first defeat is 20%, rising to 40% for the second and 60% for the third and successive defeats. See http://bit.ly/2Dj6khN.
HMRC has published a detailed technical guidance note on the serial tax avoidance legislation, which introduces a range of new sanctions for taxpayers who use tax avoidance schemes that HMRC later defeats in a court or tribunal.
The guidance makes clear that the legislation applies not just to persistent avoiders, but also to taxpayers who have used only one avoidance arrangement that has been defeated. The legislation, introduced by Finance Act 2016, Sch 18, will affect all new avoidance arrangements entered into on or after 15 September 2016 and defeated after that date. It may also affect existing avoidance arrangements entered into before 15 September 2016, where they are defeated after 5 April 2017.
On a relevant defeat of an avoidance arrangement, HMRC will have 90 days to issue a warning notice, requiring the taxpayer to submit information annually during the warning period. Further sanctions include penalties, naming, and restrictions on access to certain direct tax reliefs.
The penalty for a first defeat is 20%, rising to 40% for the second and 60% for the third and successive defeats. See http://bit.ly/2Dj6khN.
