A reporting requirement proposed in the autumn statement marks a continuing war on professional advisers including tax lawyers, a leading international firm warned. The statement announced that the government would consult on requiring intermediaries arranging complex structures for clients holding money offshore to notify HM Revenue & Customs of the structures and the related client lists.
Jason Collins, head of tax at international firm Pinsent Masons said the requirement would potentially affect lawyers, accountants, banks, fund providers and trust and company service providers, both in the UK and overseas. ‘One has to wonder why this is needed given that the common reporting standard is effective this year and will provide much of this information anyway.’
He noted that while the common reporting standard is an international measure, the new step is taken by HMRC on its own. ‘This is another example of the UK wanting to drive the agenda.’
The latest proposal follows indications that the government will implement widely criticised penalties for enablers of tax avoidance schemes later overturned by HMRC. The Law Society last month said the proposals fail to distinguish between abuse and legitimate advice. ‘Overall the measures as put forward are likely to present a barrier to taxpayers in taking full and frank advice in relation to their tax matters.’
Collins echoed these concerns. ‘No detail has been provided but the government has said the new rules will “reflect” responses to the consultation over the summer.’ He urged the government to apply the new penalty only to promoters of mass-marketed schemes rather than bespoke professional tax advice on individual circumstances.
‘If it applies to the latter, you will have trouble finding anyone willing to give tax advice any more, and that would be unacceptable and counterproductive.’