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Tax avoidance sanctions 'premature'

Posted: 16 March 2015

The Law Society tax law committee has denounced HM Revenue and Customs (HMRC) plans on tax avoidance as 'premature'.

HMRC is proposing to introduce new penalties for 'serial users of tax avoidance schemes' and those whose planning is counteracted by the general anti-abuse rule.

The Law Society tax law committee has denounced HM Revenue and Customs (HMRC) plans on tax avoidance as 'premature'.

HMRC is proposing to introduce new penalties for 'serial users of tax avoidance schemes' and those whose planning is counteracted by the general anti-abuse rule.

Law Society tax law committee chair Gary Richards said: 'The government's proposals are premature. HMRC's legislation on follower notices and accelerated payments has only recently been introduced. If these measures meet their objectives, and it is too early to assess this, HMRC's latest proposals on serial users will be unnecessary.

'We are concerned that HMRC is not using its existing powers to litigate, instead wasting resources by attempting to introduce new legislation at a time when the deterrent effect of the general anti-abuse rule has yet to be established.'

Follower notices require taxpayers to accept judgments made in other cases and amend their returns, or risk penalties for continuing to contest tax assessments. Accelerated payments require taxpayers to pay money upfront, pending a decision on whether tax is actually due. Both policies were only introduced in the Finance Act 2014 and the general anti-abuse rule in the preceding year.

Ends

Notes to editors

Read the Law Society response.

About the Law Society

The Law Society is the independent professional body, established for solicitors in 1825, that works globally to support and represent its members, promoting the highest professional standards and the rule of law.

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