Opinion Former Article

CIOT welcomes consultation on targeted anti-avoidance proposals

The Chartered Institute of Taxation (CIOT) has welcomed the launch today of a government consultation on tax avoidance schemes and supports HMRC in trying to tackle the problems in this area.

‘Raising the stakes on tax avoidance’, a consultation document published by HM Revenue and Customs, sets out a number of proposals relating to the promotion and use of so-called high-risk avoidance schemes, aimed at reducing the use of such schemes.1

Commenting, CIOT President Stephen Coleclough said:

“Those members of the public who become end users of high risk avoidance schemes are sometimes misled by the promoters of such schemes and are not fully made aware of the risks or consequences of their decisions. The CIOT has previously raised concerns about promoters of schemes whose conduct could amount to misselling. We are pleased that the Government are continuing to explore whether more can be done in this area.

“It is important that HMRC’s resources are targeted at those who promote and take advantage of abusive schemes, rather than creating bureaucratic procedures that will make life harder for mainstream tax advisers and their clients. The Government rightly acknowledge this in the consultation document.

“We are pleased to note the Government’s recognition that tax advisers are vital to the administration of our tax system. The Government is right to say that tax advisers need to be transparent with their clients as to all the risks as well as the potential benefits of any course of action. This is how a good tax adviser advises a client. When it comes to advising on any avoidance scheme a client may have offered to them this means fully explaining both the reputational and the litigation risks, as well as the ultimate probability of the scheme failing.”

Notes for editors

1.       The consultation document proposes:
·         forcing high-risk promoters of avoidance schemes to provide details of their products to HMRC using suitable information powers and penalties;
·         ensuring that users of high-risk promoters’ schemes appreciate the risks they are undertaking and understand the consequences;
·         raising the standard of reasonable excuse and reasonable care for high-risk promoters and the users of their avoidance schemes;
·         encouraging users of avoidance schemes to settle their tax affairs after similar cases have lost in court; and
·         amending the Disclosure of Tax Avoidance Schemes (DOTAS) regime to make sure the right information gets to HMRC at the right time.
(taken from Executive Summary to the document)

The consultation document can be read at:

2.       The Chartered Institute of Taxation

The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries.  The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 16,800 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

James Knell
External Relations Officer

D: +44 (0)20 7340 2702
Chartered Institute of Taxation
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The Association of Taxation Technicians
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