Schedule 16 of Finance (No.2) Act 2017 introduces new penalties for enablers of defeated tax arrangements (the ‘penalties for enablers’ rules).
These new penalties allow HMRC to tackle all aspects of the marketing and supply of avoidance schemes. They build upon the rules targeting promoters of tax avoidance schemes (POTAS) introduced by Finance Act 2014, but have a much wider scope, extending beyond those who promote tax avoidance schemes to those involved at any step in their development, design, management or implementation.
The penalties for enablers rules came into effect on 16 November 2017 (being the date Finance (No.2) Act 2017 received Royal Assent). They only apply to tax arrangements entered into and enabling action taken on or after that date.
A recent ATT technical article Penalties for enablers of defeated tax arrangements provides a short summary of the new rules and their scope. This follow up article is intended to address what the penalties for enablers rules mean in practice for members by considering some Frequently Asked Questions (FAQs).
This is a complex area, and the below is only intended as an introduction to the areas which members might wish to consider. It is not intended to act as detailed guidance, and should not be relied upon by ATT or CIOT members. HMRC’s guidance (which can be found here) should be consulted for further information.