Penalties for facilitating avoidance schemes involving non-resident promoters

Following our Tax Disputes and Resolutions team’s recent article in Taxation ‘HMRC’s power to publish information about avoidance schemes’ Finance Act 2022, s 86 (read the full article here), HMRC has published guidance on penalties for facilitating avoidance schemes involving non-resident promoters, Finance Act 2022, s 91 schedule 13.  The legislation introduces a new penalty that is to be applied to UK entities who facilitate tax avoidance schemes involving non-resident promoters.

The penalty will be up to 100% of the total fees or equivalent thereon received by all entities involved in the promotion of the avoidance scheme

This is part of HMRC’s wider focus on clamping down on promoters.

Tackling tax avoidance schemes involving offshore promoters has proved a challenge for HMRC.  The new penalty is a positive step to tackle non-resident promoters of tax avoidance schemes.

The new penalty together with POTAS and Enablers penalties and the publication of information to identify promoters will act as a greater deterrent to UK entities from promoting such schemes.

For more information, please do not hesitate to contact Danielle Ford, Head of Tax Disputes and Resolutions.