As part of broad and sweeping moves to clamp down on avoidance, the government has announced it is to consult on new proposals to target the very promoters of some of the most aggressive schemes.
The new moves, announced in the Budget will see the government approach this by tackling 'both the supply and demand of these schemes' the HM Treasury revealed in the details of the published Budget.
In the last year, scores of celebrities and well known sports stars have hit the headlines for being caught up in avoidance schemes - such as the Eclipse Film Partnership scheme in which ex-England coach Sven Goran Eriksson and Manchester United boss Sir Alex Ferguson both invested. The schemes were promoted by aggressive tax advisory companies. Several who were caught up in the schemes claimed they were victims of mis-selling
HMRC is to shortly begin consultation on new 'naming and shaming' proposals alongside a range of targeted disclosure requirements and penalties.
As part of the clampdown, consultation will also begin on new powers to take tougher action against high risk promoters of tax avoidance schemes, including new information and penalty powers, and the possible use of 'naming and shaming', HM Treasury confirmed.
Announcing the moves, George Osborne said: 'We will name and shame the promoters of tax avoidance schemes. My message to those who make a living advising other people how aggressively to avoid their taxes is this: this government is not going to let you get away with it.'
Commenting on the moves, CIOT technical director Tina Riches, said that the organisation noted the proposals for the potential 'naming and shaming' of high risk promoters of tax avoidance schemes and 'naming' of banks that HMRC considers not to be complying with the Code of Practice on Taxation for Banks.
'The CIOT has previously raised concerns about promoters of schemes that have no realistic chance of success and suggested that "promoter penalties", in a similar manner to misselling, may be appropriate. But in all of these areas the difficulty is likely to be in determining where the borderline is.
'There must be protection for innocent parties. It would be of concern if this was merely down to the view of HMRC, which could change over time, so there must be certainty over what behaviour would be caught and an appeals process. We are pleased to note that the government propose to consult in this area,' said Riches.
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