HMRC has published a 61-page draft guidance note on the new penalties for those who enable the use of tax avoidance arrangements which HMRC later defeats. The penalties will apply to arrangements and actions following royal assent to the second Finance Bill 2017. HMRC must first obtain the opinion of the GAAR advisory panel before it can charge a penalty. The guidance sets out how the GAAR ‘double reasonableness’ test will apply and describes the degree of protection offered by compliance with the Code of practice on taxation for banks and the guidelines on Professional conduct in relation to taxation (PCRT).
In relation to the Code of practice on taxation for banks, the guidance states that the legislation does not require banks to introduce additional governance so long as their ‘existing code governance is robust’, as it is unlikely that a code-compliant transaction could produce an abusive tax advantage to which the legislation would apply.
Concerning the PCRT guidelines, the guidance suggests it is unlikely that persons will come within scope of the legislation where they ‘conduct their business in accordance with the PCRT and act wholly within the spirit of the standards for tax planning’, although the PCRT will not provide a blanket exemption.
Comments are invited on the draft guidance by 30 November 2017. See http://bit.ly/2xmeNKR.
HMRC has published a 61-page draft guidance note on the new penalties for those who enable the use of tax avoidance arrangements which HMRC later defeats. The penalties will apply to arrangements and actions following royal assent to the second Finance Bill 2017. HMRC must first obtain the opinion of the GAAR advisory panel before it can charge a penalty. The guidance sets out how the GAAR ‘double reasonableness’ test will apply and describes the degree of protection offered by compliance with the Code of practice on taxation for banks and the guidelines on Professional conduct in relation to taxation (PCRT).
In relation to the Code of practice on taxation for banks, the guidance states that the legislation does not require banks to introduce additional governance so long as their ‘existing code governance is robust’, as it is unlikely that a code-compliant transaction could produce an abusive tax advantage to which the legislation would apply.
Concerning the PCRT guidelines, the guidance suggests it is unlikely that persons will come within scope of the legislation where they ‘conduct their business in accordance with the PCRT and act wholly within the spirit of the standards for tax planning’, although the PCRT will not provide a blanket exemption.
Comments are invited on the draft guidance by 30 November 2017. See http://bit.ly/2xmeNKR.
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")