HMRC has published draft legislation which identifies 11 ‘threshold’ conditions targeting specified behaviours by promoters of tax schemes, and provides for a ‘conduct’ notice to be issued to those promoters. The threshold conditions include deliberate tax defaulters, and promoters in breach of the banking code of practice or who promote schemes which the GAAR advisory panel has determined fail the double reasonableness test. The conduct notice will set out various conditions that the promoter will have to comply with. If a promoter fails to comply with a conduct notice, he may be issued with a ‘monitoring’ notice, which can be appealed. Names of promoters subject to a monitoring notice will be published by HMRC, including details of how the conduct notice was breached, and monitored promoters will be required to publish their monitored status to clients. A monitored promoter will be subject to enhanced information powers and could be liable for penalties for non-compliance of up to £1m. Monitored promoters will also have to comply with higher standards in order to claim reasonable excuse or reasonable care. Finally, the new provisions include a new requirement under the disclosure of tax avoidance schemes (DOTAS) regime for further information to be provided by a promoter when requested by HMRC. The provisions will come into force at the same time as the Finance Act 2014.
HMRC said that ‘the measure is part of the government’s strategic response to avoidance and is to deter the use of avoidance schemes through influencing the behaviour of promoters, their intermediaries and clients.’
HMRC has published draft legislation which identifies 11 ‘threshold’ conditions targeting specified behaviours by promoters of tax schemes, and provides for a ‘conduct’ notice to be issued to those promoters. The threshold conditions include deliberate tax defaulters, and promoters in breach of the banking code of practice or who promote schemes which the GAAR advisory panel has determined fail the double reasonableness test. The conduct notice will set out various conditions that the promoter will have to comply with. If a promoter fails to comply with a conduct notice, he may be issued with a ‘monitoring’ notice, which can be appealed. Names of promoters subject to a monitoring notice will be published by HMRC, including details of how the conduct notice was breached, and monitored promoters will be required to publish their monitored status to clients. A monitored promoter will be subject to enhanced information powers and could be liable for penalties for non-compliance of up to £1m. Monitored promoters will also have to comply with higher standards in order to claim reasonable excuse or reasonable care. Finally, the new provisions include a new requirement under the disclosure of tax avoidance schemes (DOTAS) regime for further information to be provided by a promoter when requested by HMRC. The provisions will come into force at the same time as the Finance Act 2014.
HMRC said that ‘the measure is part of the government’s strategic response to avoidance and is to deter the use of avoidance schemes through influencing the behaviour of promoters, their intermediaries and clients.’
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