New guidance on penalties for tax evasion enablers issued by HMRC
New guidance on penalties for enablers of defeated tax avoidance has been issued by HM Revenue & Customs.
This sets out to provide firms with an additional description and advice on Clause 65 and Schedule 16 of the Finance (No. 2) Act 2017, which the SRA highlight has particular importance for legal professionals involved with the delivery of tax advice.
This is because it enables HMRC to address a wide-range of tax-avoidance issues, particularly in terms of those referred to as ‘enablers’.
Enablers can be anyone who is, to any extent, responsible for the design, marketing or facilitation of another person to enter into a tax arrangement which is abusive.
Should a tax arrangement be defeated in a tribunal, court or are counteracted, a penalty could be faced by an enabler.
A warning notice was issued by the Solicitors Regulation Authority last year, providing guidance for legal professionals as to their duties in relation to tax avoidance. This advised that ‘the widespread assumption that “tax avoidance is legal” no longer applies’, and stated that solicitors and law firms should be familiar with the changes in order to make sure that they comply with the Principles of the regulator at all times.