Tax schemes under the spotlight

HM Revenue and Customs (HMRC) is proposing to introduce measures aimed at stopping the sale and use of high risk tax avoidance schemes.

HMRC issued its proposals in a consultation document entitled High Risk Tax Avoidance schemes.

Under the plans, HMRC said it is looking at listing schemes that are unlikely to provide the tax savings that are promised.

At the moment, taxpayers who use such schemes can take advantage of the fact that the payment of any disputed tax can be deferred until HMRC has completed an investigation.

But the new plans would mean that users of a listed scheme must disclose its use to HMRC. They would also be subject to an additional charge on underpaid tax.

However, taxpayers would be able to safeguard against the additional charge by paying any disputed tax up-front.

David Gauke, Exchequer Secretary to the Treasury, said: “These are highly aggressive and artificial tax avoidance schemes which we want to stop. For too long, wealthy taxpayers were using these schemes as a cheap loan from government.

“Our proposals would stop this practice, reducing the cost of HMRC’s interventions and ensuring a fairer tax system.”

The proposals were first announced in the 2011 Budget.

The consultation, which runs until 31 August 2011, can be found at