Government response to report on HMRC powers

The government has published its response to the House of Lords Economic Affairs Finance Bill Sub-Committee report on whether new powers for HMRC are fair and proportionate. Recommendations accepted by the government include:

• HMRC should re-examine the triggers for the promoters of tax avoidance schemes (POTAS) rules, to reduce the negative impact on bona fide professional advisers;
• current legislation to target POTAS is sufficient but this area should be continuously monitored for areas of improvement;
• any action to crack down on POTAS that impacts on HMRC’s ability to stop tax avoidance marketing schemes should be expedient and effective;
• taxpayers should be better informed to help them identify tax avoidance schemes, eg a specific communications campaigns setting out what to watch out for;
• HMRC should set up a dedicated tax avoidance reporting service to allow ease of reporting by taxpayers; and
• any suggestion for new or extended HMRC powers should set out why current powers are insufficient to achieve policy objectives.