The HMRC is working on draft regulations to exclude two types of persons from the definition of “promoter” for the purposes of the Promoters of Tax Avoidance legislation.
The regulations will exclude from the definition of “promoter” a company that provides in-house taxation services to companies in the same group as well as an adviser who provides advice on a distinct point of legal or accounting matters and are not involved in the overall planning of tax avoidance scheme.
The HMRC can impose fines of up to GBP1m (USD1.6m) on scheme promoters as per the Promoters of Tax Avoidance legislation. Tax planning companies must state on their website that they are provider of tax avoidance services and they must inform all of their clients and issue them with a “promoter reference number.” The clients must mention the “promoter reference number” on their tax returns and any other documents they send to the HMRC. Advisers can be imposed fines if they fail to comply with these rules. This legislation will have retrospective effect from July 17, 2014, the date Royal Assent was given to Finance Act 2014.
