REV BN 28: Tackling tax avoidance – disclosure requirements
Who is likely to be affected?1. Promoters who devise and market certain tax schemes and arrangements, and taxpayers who use them. General description of the measure2. The new disclosure rules are designed to provide the Inland Revenue with information about potential tax avoidance schemes and arrangements much earlier than at present to enable swifter and more effective investigation and, where appropriate, counteraction. Operative date3. Details of when the rules will come into effect will be included in the Finance Bill. Current law and proposed revisions4. The new rules will require tax scheme promoters to provide details of certain defined schemes and arrangements to Inland Revenue shortly after the scheme is sold. They will be required to provide a description of the scheme, including details of the types of transactions planned which form part of the scheme and the tax consequences of the arrangements and the statutory provisions they rely upon. Inland Revenue will register these schemes and allocate each a reference number. 5. In most cases, taxpayers using schemes and arrangements within the new rules will be required only to include on their tax return the registration number of the scheme, which promoters will be required to provide to them. But where they have used a scheme purchased from an offshore promoter which affects their UK tax liability, or where the scheme has been devised in-house rather than purchased from a promoter, taxpayers themselves will be required to provide details of the scheme to Inland Revenue. Taxpayers will be required to disclose details of schemes shortly after the scheme was purchased or first implemented. 6. The new rules will require disclosure of schemes and arrangements where a main benefit is the obtaining of a tax advantage and where they meet further conditions. These conditions are designed to target schemes and arrangements based on financial products, and employment based products. Full details of these conditions will be published in the Finance Bill. 7. The tax treatment of particular transactions will not be affected by the new rules. 8. There will be penalties for failing to comply with the disclosure requirements. Details will be published in the Finance Bill. Further advice9. If you have any questions about this change, please contact: Rowena Kisely on 020 7438 4388
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