“It was no secret that the government wanted to introduce a penalty aimed predominantly at serial abusers of tax avoidance schemes which consistently fail before the Courts,” said Richard Morley, partner, tax dispute resolution at BDO.
“The penalty will be a way to claw back some of the money spent pursuing the serial avoiders. It has also been announced that there will be small changes made to the GAAR’s procedure to improve its ability to tackle marketed avoidance schemes. This again highlights HMRC’s determination to crackdown on those who had previously taken the system for granted.”
Fund raising
The government is committed to raising an additional £5bn ($7.6bn, €7.1bn) a year through tackling avoidance, aggressive tax planning, evasion, non-compliance, and imbalances in the tax system by 2019-20.
HM Revenue & Customs (HMRC) will receive £800m to fund additional work to tackle evasion and non-compliance by 2020-21.
Finance bill
In addition to the 60% penalty, Osborne outlined a number of measures to be included in the Finance Bill 2016:
- A new criminal offence removing the need to prove intent for the most serious cases of failing to declare offshore income and gains.
- Civil penalties for deliberate offshore tax evasion; including the introduction of a new penalty linked to the value of the asset on which tax was evaded and increased public naming of tax evaders.
- Civil penalties for those who enable offshore tax evasion will be introduce – including the public naming of those who have enable evasion.
- Tough new measures against those who persistently enter into tax avoidance schemes that are defeated by HMRC.
- 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.
