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HM Revenue and Customs (HMRC) are seeking to introduce wide ranging powers to deal with tax avoidance.  “Firstly, we’d like to make it clear that we’ve never advised our clients to participate in risky tax avoidance schemes, and neither do we intend to.  So, for that reason we’re well placed to give a balanced opinion on the proposals” explains Michael Burgess ACA CTA, Mitten Clarke’s chartered tax advisor.

It’s worth noting that HMRC issued its proposals on 24 January 2014, and only gave a 31 day consultation period for the professional bodies to respond.  “As this is by far the busiest week of the year for accountants, it raises the question if HMRC hoped the consultation period might come and go without us noticing” says Michael.

The proposals are far reaching and quite frightening.

One proposal will mean that if HMRC succeeds in bringing a case against a taxpayer then it has the power to apply that ruling to other cases which it considers to be the same.  That’s all well and good but these ‘other’ taxpayers have no automatic right of appeal.  The only means of appeal is to deliberately incur financial penalties and so force an appeal process, or to formally apply for what’s known as a ‘judicial review of the decision’.  This can’t be right?

Also, those users of tax avoidance schemes which have already been disclosed to HMRC will fall under the proposed new rule of ‘pay now or at a point of HMRC’s choosing’.  Interestingly, the high risk promoters won’t be affected, since they haven’t disclosed their schemes to HMRC in the first place!

“To re-iterate the point made earlier, Mitten Clarke don’t encourage or condone tax avoidance schemes, we simply feel this is the thin end of the wedge.  It’s every taxpayer’s right to have a simple right of appeal and so, for that reason, we have made strong representation on behalf of taxpayers to HMRC, our institute (the ICAEW) and the Chartered Institute of Taxation (CIOT).  We feel a much fairer approach would be to appoint an independent panel to look at these taxpayers on a case by case basis” says Michael.

If you need tax advice, or would like more information on these proposals, then feel free to contact Michael Burgess at michael.burgess@mittenclarke.co.uk or call him on 01782 279615.


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