The British government on Wednesday announced plans to clamp down on accountants, financial planners and advisers who enable tax avoidance, with heavy fines for those caught.
Firms and individuals could have to pay up to 100 percent of the tax they helped their clients avoid if they are found to have enabled a scheme that is subsequently deemed unlawful, under proposals put out for consultation.
Accountants currently face little risk when selling schemes even though their clients can be forced to pay penalties if successfully prosecuted.
“People who peddle tax avoidance schemes deny the country of vital tax revenue and this government is determined to make sure they pay,” said junior finance minister Jane Ellison.
“These tough new sanctions will make would-be enablers think twice and in turn reduce the number of schemes on the market.
“Those who seek an unfair advantage, or who provide the services that enable it, and who then frustrate… efforts to identify, investigate and resolve these cases, should bear real risks and costs for their choices.”
Prime Minister Theresa May, and her predecessor David Cameron, pledged to clampdown on tax avoidance and evasion following on from the Panama Papers data leak in April, which revealed the offshore financial activities of individuals and companies across the world.
Frank Haskew, head of tax at the Institute for Chartered Accountants in England and Wales (ICAEW), warned in a statement that the new rules must be properly focused.
“The government needs to ensure any new rules are properly targeted only to tackle those advisors that promote aggressive tax schemes rather than the vast majority of reputable advisers engaged in ordinary tax planning,” he said.