High risk promoters of tax avoidance face government clampdown

Today the government is taking further tough action to crack down on tax avoidance promoters.

Under new rules introduced by the Financial Secretary to the Treasury, David Gauke, high risk promoters must now publicise the fact that they are being monitored by HM Revenue and Customs (HMRC), so that potential customers are aware of the risks of using them.

Tax avoidance promoters commonly market schemes which overwhelmingly do not work. Laws introduced last summer allow HMRC to issue these promoters identified as ‘high risk’ with Conduct Notices requiring them to change their behaviour. 

The new rules mean if a promoter does not comply with the terms of a Conduct Notice they can be issued with a tougher ‘Monitoring Notice’, which, among other things, will mean the promoter will be publicly named by HMRC; and will have to tell their clients that they are being monitored. If they fail to comply with the conditions of the Monitoring Notice they could face fines of up to £1 million.

Financial Secretary to the Treasury, David Gauke, said:

“The government has taken unprecedented steps to clamp down on tax avoidance.

“Our tough new rules will force high risk promoters to change their behaviour and help protect taxpayers from unscrupulous advice. Promoters who do not change their ways should be in no doubt – HMRC is taking swift and decisive action to use these new rules.”

HMRC has already written to a number of promoters warning them of the consequences if they don’t change their behaviour, and has also sent the first Conduct Notice, which requires a promoter to change its ways.

Notes to editors:

1. Regulations laid on Friday 6 March 2015 set out further detail on the consequences of being a ‘high risk promoter’. They can read here: http://www.legislation.gov.uk/uksi/2015/549/introduction/made
2. In November 2014 HMRC published a list of “10 things a promoter won’t always tell you” that included not only the possible monetary costs and reputational damage of tax avoidance, but also the risk of a potential criminal conviction if information is concealed from the authority. Read the list at: https://www.gov.uk/government/news/ten-things-you-need-to-know-about-tax-avoidance. 
3. The Promoters of Tax Avoidance Schemes (POTAS) legislation was introduced in Finance Act 2014 following consultation. It requires promoters of this kind to change their behavior either voluntarily or, if they do not do so, through the use of information powers which affect them, their intermediaries and their clients – including the power to name promoters and fines of up to £1 million.
4. Follow HMRC Press Office on Twitter @HMRCpressoffice
5. HMRC's Flickr channel www.flickr.com/hmrc.gov.uk