Budget for tax avoidance

Gavin McFarlane of Temple Chambers Cardiff

It is no secret that HM Treasury ministers have been stung by the success of accountants and other financial advisers in promoting tax avoidance schemes to high net worth clients. The Treasury contemplated a general anti avoidance measure before the Budget but the Chancellor opted instead to require advisers, whether accountants, lawyers independent financial advisers or banks, to inform the Inland Revenue in advance of tax avoidance schemes, which they wished to market to their clients, with a view to curbing those of which they disapprove at the earliest opportunity. Precedents for such a measure exist in Australia, Canada and the United States. The Finance Bill provides for listed schemes (which will be defined in secondary legislation) to be registered. Businesses with an annual turnover of £600,000 or more will have to disclose use of such schemes. Penalties for non-disclosure may be up to 15% of the tax avoided.