On 17 August 2016, HMRC issued a consultation document entitled “Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document”. The government is proposing to introduce sanctions for enablers of tax avoidance schemes and arrangements.
The proposals are extremely wide. An enabler is described as: “anyone in the supply chain who benefits from an end user implementing tax avoidance arrangements and without whom the arrangements as designed could not be implemented”. This could include lawyers, accountants, IFAs and other professional advisers. Those caught would be subject to a penalty applied by HMRC up to a value of 100% of the benefit derived from the arrangements.
The penalty would be triggered by the “defeat” of the relevant arrangements by judicial determination (or agreement with HMRC). The arrangements which will be covered will be those subject to Follower Notices, counteracted by the GAAR, the subject of targeted anti- abuse rules, or registered under DOTAS.
The consultation closes on 12 October 2016.
A copy of the consultation document can be found here.