Accountants, lawyers and advisory firms that devise tax avoidance schemes for businesses and individuals that are successfully challenged in court face substantial financial penalties under proposals from the UK Treasury.
In a just-published consultation paper, it proposes that the lost money is returned to the taxpayer through a fine of up to 100% of the tax avoided through schemes such as offshore tax havens. Accountants could face fines even in cases where the tax avoidance advice they provide isn’t actually illegal.
Last month, upon taking over as UK prime minister, Theresa May described tax as “the price we pay for living in a civilised society” and promised a crackdown on aggressive avoidance schemes.
“It doesn’t matter to me whether you’re Amazon, Google or Starbucks, you have a duty to put something back, you have a debt to fellow citizens and you have a responsibility to pay your taxes,” she said.
Under current UK rules tax avoiders risk incurring significant financial costs when HM Revenue & Customs (HMRC) defeats them in court but that same risk does not extend to those who advised on, or facilitated, the avoidance scheme.
Opening a 12-week consultation period on the proposals, Jane Ellison, financial secretary to the UK Treasury, commented: “People who peddle tax avoidance schemes deny the country of vital tax revenue and this government is determined to make sure they pay. The vast majority of their schemes don’t work and can land their users in court facing large tax bills and other costs.”
The UK government has stressed that it is not targeting legitimate means of reducing tax bills, but wants to eliminate schemes that bend the rules to gain a tax advantage that Parliament never intended, an abuse estimated to result in lost tax revenues of nearly £3bn a year.
The Treasury proposals were welcomed by pressure group the Tax Justice Network, although it noted that the new rules would need to be enforced in the courts by HMRC. Its research director, Alex Cobham, said: “The proposal to go after enablers of schemes that have been successfully challenged will have no impact on this major area of tax losses, unless the government is finally willing to take on multinationals and the big four accountancy firms in court.”
The new US president has lined up early meetings with the leaders of Canada and Mexico to renegotiate the 1994 agreement with its two neighbouring countries.
Global infrastructure projects attracted a record US$413bn of investment in 2016, driven higher by aggregate transaction value of $131bn in Asia.
The figure compares with 6.9% a year earlier and is the lowest since 1990, although in line with the official growth target.
The London listing, described as a “vote of confidence” in the UK financial centre post-Brexit, replaces the bank’s old listing on the Athens Stock Exchange.