Tax Avoidance Enabler Penalties

Published / Last Updated on 17/11/2017

tax avoidance finesTax Avoidance Enabler Penalties.

The Finance Bill 2017 has made provision for significant fines and penalties for not just people who use tax avoidance schemes but also the so called ‘enablers’ i.e. the provider of the scheme and any advisers involved in the same tax avoidance scheme chain.

Not only will the tax ‘avoided’ be payable in full.  If HMRC wins any legal case it contests and takes to court via a 1st Tier Tax Tribunal, all people involved will also face fines and penalties:

  • The individual or company benefitting from the tax avoidance scheme = 100% penalty (i.e. pay the avoided tax plus a 100% fine equivalent), effectively doubling the total paid.
  • The supplier and adviser and all involved = 100% penalties each

Independent advisers are equally at risk.

Many ‘clients’ have used a defence that if they took advice from a non-independent adviser they then claim they had taken ‘reasonable care’ to avoid breaking the law.  This has now been quashed and the only defence for reasonable care will be if the client takes advice from and an independent adviser.

Our position

We have never and never will give advice on tax mitigation schemes that have not been tested and approved by HMRC.  There are so many legal ways to make money, save money and pay less tax.  Why try and be a ‘clever dick’?  If tax is due it is due, if there are legal tax breaks, incentives and ways to plan for your estate or inheritance tax mitigation, the use them.