Management of Taxes


MPs debated the Report Stage and Third Reading of the Criminal Finances Bill in the House of Commons on Tuesday 21 February. Some amendments were made at Report stage and the Bill passed its Third Reading. The Bill, which includes new corporate offences of domestic and foreign failure to prevent tax evasion, now progresses to the House of Lords for further scrutiny.

This consultation is considering the introduction of a new legal requirement that intermediaries creating or promoting certain complex offshore financial arrangements notify HM Revenue and Customs (HMRC) of their creation and provide a list of clients using them. Clients in their turn would be expected to notify HMRC of their involvement via a notification number on their self-assessment tax return or personal tax account. Those who fail to comply with these requirements would incur civil sanctions.

The draft legislation in clause 91 follows a consultation document “Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document” issued on 17 August 2016.  The response document issued on 5 December 2016 referred to modifying the existing penalty regime for users of tax avoidance, “so that penalties are chargeable when complex tax avoidance arrangements are defeated”. HMRC state in the explanatory notes to the draft legislation that the aim of the clause is to act as a disincentive to entering into tax avoidance.

To reduce complexity, cut down costly errors and create a more stable, predictable environment for taxpayers, the Government must change the way it makes tax and budget decisions, argues a new report from CIOT and two other institutes.

This is the latest in a series of consultations by HMRC which is considering changing the sanctions available for offshore tax evasion. It is proposing to introduce a ‘Requirement to Correct’ (RTC) obligation that aims to compel those with offshore interests who have yet to put their UK tax affairs in order to do so by September 2018 ahead of the widespread adoption of the Common Reporting Standard (CRS).  Taxpayers who fail to correct their tax affairs by September 2018 will be subject to a single, tougher set of Failure to Correct (FTC) sanctions for offshore tax evasion.

The CIOT comments sent to HMRC on 12 October on HMRC’s Discussion document “Strengthening Tax Avoidance Sanctions and Deterrents” in which HMRC were seeking views on the following specific proposals:

The CIOT comments sent to HMRC 12 October on Strengthening Tax Avoidance Sanctions and Deterrents.

The Finance Committee of the Scottish Parliament issued a call for evidence at the end of June 2016 to assist their inquiry on a Scottish approach to taxation. This follows the devolution of taxation powers via the Scotland Act 2012 and 2016, which means a greater focus on revenue-raising. As a result, the Finance Committee wished to start a debate on the approach to adopt in developing a Scottish approach to taxation.

A year ago, in his speech to Labour Conference, Shadow Chancellor John McDonnell announced he had commissioned a review of HMRC. That review, chaired by Professor Prem Sikka, reported today.

HMRC yesterday announced plans for a major reorganisation, with current directors-general being assigned new responsibilities