Source · Select Committees · Public Accounts Committee
Recommendation 22
22
HMRC told us the nature of tax avoidance has changed.
Conclusion
HMRC told us the nature of tax avoidance has changed. It said the bulk of avoidance schemes now relate to employment taxes and are not targeted at affluent people but middle-income earners, some of whom knowingly enter avoidance schemes and others who unwittingly get involved.39 In 2019, HMRC introduced the loan charge to recoup tax from people who had used ‘disguised remuneration’ schemes to avoid income tax.40
Government Response
Not Addressed
HM Government
Not Addressed
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 HMRC continues to build on the strategy outlined in ‘Tackling promoters of mass- marketed tax avoidance schemes’ published in March 2020. This includes raising awareness and helping taxpayers steer clear of avoidance through targeted communications and early interventions. 5.3 HMRC refreshed their ‘Tax avoidance – don’t get caught out’ campaign in 2021, which helps taxpayers spot tax avoidance schemes, understand the risks from getting involved in avoidance, and get help and further information. HMRC also highlight avoidance schemes through their ‘Spotlight’ publications and articles in trade press. Since April 2020, HMRC have written to around 33,000 taxpayers who may have entered into a tax avoidance scheme, advising them how to exit the scheme before they build up significant bills. 5.4 HMRC continue to build on their work with professional and partner bodies. In November 2020, HMRC and the Advertising Standards Authority issued a joint Enforcement Notice setting out what promoters should and should not include in advertising. As at October 2021, eleven websites had been shut down and 5 sites amended to comply with the notice. 5.5 In November 2021, HMRC published ‘Use of marketed tax avoidance schemes in the UK (2019-20)’, which provides information about the state of the UK avoidance market, including what HMRC are doing to tackle those who promote or enable avoidance schemes. New powers introduced in Finance Act 2022 enable HMRC to name promoters and the schemes they promote at the earliest possible stage, to support taxpayers to stay clear of avoidance.