Source · Select Committees · Public Accounts Committee
Recommendation 23
23
We are concerned about how taxpayers are protected from those who promote avoidance schemes, and...
Conclusion
We are concerned about how taxpayers are protected from those who promote avoidance schemes, and the financial damage that can follow if taxpayers unknowingly enter unlawful schemes. We therefore asked HMRC what progress it had made in pursuing the promoters of illegal schemes. It told us its strategy for tackling tax avoidance was two-pronged. It wants to reduce both the supply of schemes from tax advisers and the demand for them from taxpayers. HMRC considers it has been successful in driving the respectable end of the tax profession out of offering tax avoidance. It said what remains is a core of about 20 or 30 promoters many of whom are based offshore and hide behind complex corporate structures. HMRC told us that it had extensive powers for tackling promoters, and the government has recently announced further powers to enable HMRC to act more quickly against providers. It said it was using its full range of powers, from criminal investigation and prosecution through to using insolvency law and the Advertising Standards Authority to try and drive promoters out of the market. It also said that the location of promoters offshore did not deter it from bearing down on them.41
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.