Autumn Statement 2016: Strengthening tax avoidance sanctions and deterrents

The Government will shortly publish draft legislation regarding the new penalty for enablers of tax avoidance arrangements that are later defeated by HMRC.

The legislation will also remove the ‘reasonable care’ argument for users of the scheme where the advice taken was not independently provided. This means anyone caught by the legislation will face tax-geared penalties.

This legislation is aimed specifically at providers and promoters of tax avoidance schemes who until now have not been subject to tax-geared penalties.

Also, while the providers of a scheme usually obtain counsel’s opinion to show the client that the scheme was legal and effective at the time they were sold the scheme, this will no longer be sufficient for the user if they want to argue ‘reasonable care’.