The Government confirmed its commitment to tackling tax evasion and avoidance, alongside aggressive tax planning and non-compliance. Those 'seeking to evade or avoid tax using offshore structures' are of particular interest to HMRC, with a consultation announced on the requirement to notify HMRC of such structures.
The Government has announced that it will publish a response to the consultation on its proposal to require notification to HMRC of some offshore structures. Under this proposal, intermediaries creating or promoting certain complex offshore financial arrangements will be required to notify HMRC of their creation. The response will be published on 1 December 2017.
In early 2017, the Government consulted on a legal requirement for intermediaries to notify HMRC of various defined types of complex offshore arrangements and the related lists of clients using them. The Government has now announced its intention to publish a response to the consultation. As the OECD and EU are also considering similar measures, the Government will feed the responses to the consultation into the work carried out internationally.
"As we have commented previously, the proposals can be seen as part of the gradual tightening of tax anti-avoidance rules, together with increased sharing of financial information between governments, under the common reporting standards.
We await further details of the proposals, including the specific hallmarks by which an arrangement would need to be notified. These remain the subject of a future consultation."
The Government announced that it will extend the time limit for HMRC to assess offshore tax non-compliance to at least 12 years. This extended limit will apply where the behaviour is not deliberate. There will be a consultation on this in Spring 2018.
A discussion document will be published in 2018 to explore further methods of preventing perceived abuse of the insolvency regime to evade or avoid tax liabilities, including through the use of phoenixism.
"The Government is clearly concerned that people are circumventing the TAAR and benefiting from the disparity between CGT and income tax rates through the insolvency regime. We can therefore expect to see further rules announced following this period of discussion to tackle this perceived abuse."
The Government has announced that it will invest a further £155 million in new technology and further resources for HMRC.
It is envisaged that this investment will enable HMRC to further tackle the hidden economy, marketed tax avoidance schemes, enablers of tax fraud and non-compliance among wealthy individuals and mid-size businesses. A new taskforce will also be set up to tackle tax debts that are more than nine months old. The Government estimated that this will help bring in additional tax revenues of £2.3 billion.
"HMRC has confirmed its commitment to crack down on tax avoidance and evasion, the latter being a significant part of the tax gap. This additional investment will help provide the tools to enable it to do this."