Source · Select Committees · Public Accounts Committee
Recommendation 24
24
We asked HMRC whether it could do more to publicise its successes, including the naming...
Conclusion
We asked HMRC whether it could do more to publicise its successes, including the naming and shaming promoters of avoidance schemes. HMRC explained how it was seeking to reduce demand through transparency. It said it published annual reviews of the tax avoidance market and it was more quickly disclosing information on promoters and their schemes, to warn off potential users as early as possible. HMRC also said it litigated if promoters did not comply with rules requiring the disclosure of tax avoidance schemes to the Department. HMRC told us that it was trying to identify as quickly as possible the people who have entered into avoidance schemes. It then tells these people they are in a tax avoidance scheme and offers them help to get out. HMRC told us this was a change in its operational approach. In the past HMRC would have opened an inquiry, picked a lead case to pursue to go through the tribunals and courts, with other cases left open which could lead to tax bills building up. We welcome this change in HMRC’s approach and would like to see it do more to protect taxpayers.42 37 Q 142 38 C&AG’s Report, page R4 39 Q 2 40 HMRC, Policy paper, Tax avoidance loan schemes and the loan charge, Updated 28 July 2021 41 Qq 2–5 42 Qq 2, 4–5 16 HMRC Performance in 2020–21 2 Customer service and transformation Customer service
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.