The CIOT welcomes the draft Finance Bill 2022 proposals to clamp down on promoters of tax avoidance – particularly the robust approach to those who continue to devise, promote or sell primarily mass-marketed tax avoidance schemes – but it has reservations about the proposed power for HMRC to publish information about schemes. Key observations include:
agreement that it will be helpful for taxpayers to have as much information as possible (ideally written in plain, non-technical language) about HMRC’s view of the claims made by promoters and the potential risks of entering a scheme;
concern that the power to publish information could be used by HMRC in the future more widely than is being proposed. The CIOT would like to see a statement from the Treasury that the measure is not aimed at advisers who adhere to high professional standards and provide sound advice and support to taxpayers but is instead aimed at promoters who seek to exploit every opportunity to profit personally by sidestepping the rules;
provisions requiring HMRC to amend or withdraw incorrect or misleading information do not go far enough to rectify any reputational damage. The CIOT recommends adopting an approach similar to press complaints, ie HMRC must amend or withdraw, but should also potentially be required to publish a formal retraction and, in some cases, an apology;
HMRC should also put very strong internal governance procedures in place when deciding whether to publish information about a promoter, given the commercial and reputational consequences, and connected persons should only be named if they have involvement in the matter.
The CIOT welcomes the draft Finance Bill 2022 proposals to clamp down on promoters of tax avoidance – particularly the robust approach to those who continue to devise, promote or sell primarily mass-marketed tax avoidance schemes – but it has reservations about the proposed power for HMRC to publish information about schemes. Key observations include:
agreement that it will be helpful for taxpayers to have as much information as possible (ideally written in plain, non-technical language) about HMRC’s view of the claims made by promoters and the potential risks of entering a scheme;
concern that the power to publish information could be used by HMRC in the future more widely than is being proposed. The CIOT would like to see a statement from the Treasury that the measure is not aimed at advisers who adhere to high professional standards and provide sound advice and support to taxpayers but is instead aimed at promoters who seek to exploit every opportunity to profit personally by sidestepping the rules;
provisions requiring HMRC to amend or withdraw incorrect or misleading information do not go far enough to rectify any reputational damage. The CIOT recommends adopting an approach similar to press complaints, ie HMRC must amend or withdraw, but should also potentially be required to publish a formal retraction and, in some cases, an apology;
HMRC should also put very strong internal governance procedures in place when deciding whether to publish information about a promoter, given the commercial and reputational consequences, and connected persons should only be named if they have involvement in the matter.
