HMRC released its tax avoidance proposal on 10 April outlining a crackdown on wealthy individuals who avoid paying tax by using offshore trusts and companies in low or nil tax territories.
Fresh legislation
HMRC said, in the past, it had been successful in challenging some of these arrangements and had recovered significant amounts of tax. However, the enquiries consume considerable resources and can take several years to resolve.
“The government therefore proposes to introduce legislation to target these schemes directly and to remove any cash flow advantages for users of the arrangements.
“The essential aim of any new legislation will be to ensure that the amount of profit appropriate to UK business activity is taxable in the UK,” HMRC said.
£50m more
An impact assessment says the proposed legislation would increase tax receipts by up to £50m (€57.3m, $70.5m) per annum.
Further, it would likely impact 8,000 to 10,000 individuals who are currently involved in tax avoidance arrangements.
“The broad aim of any new legislation will be to target arrangements used by the types of business not covered by the existing rules,” HMRC said.
HMRC is seeking comments for the proposed legislation until 8 June.
