Questions & Answers
Q1
Partial Answer
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Context
The question arises from the debate over tax avoidance schemes, specifically those subject to the loan charge. There is concern about the discrepancy in prosecution efforts between scheme promoters/operators and individuals misled by these schemes.
How many promoters and operators of schemes subject to the loan charge have been prosecuted for promoting and operating those schemes?
Promotion or enablement of a tax avoidance scheme is not, in and of itself, a criminal offence. However, HMRC has made arrests or prosecuted people related to fraud, particularly in relation to disguised remuneration loan-busting schemes.
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Assessment & feedback
The number of prosecutions for promoting or operating tax avoidance schemes was not provided.
Change Of Subject
Response accuracy
Q2
Partial Answer
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Context
There is ongoing debate about the disparity in treatment between individuals who invested in tax avoidance schemes believing them to be legitimate versus the promoters of these schemes. The question highlights concern over the perceived leniency towards promoters.
My understanding is that very few promoters of these schemes have been prosecuted. Is it not rather shocking that so many people who were mis-sold the schemes on the basis that they were perfectly legitimate are being pursued so relentlessly, while the promoters are in some cases being allowed to continue their work unhindered?
The suggestion that promoters are being allowed to do just anything is quite wrong. The Finance Bill includes measures aimed at preventing the promotion of tax avoidance schemes and ensuring their disclosure, along with other related actions. HMRC takes such issues extremely seriously, as evidenced by a significant reduction in the tax gap from £3.7 billion in 1995-06 to £1.7 billion in 2018-19.
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Assessment & feedback
The specific issue of leniency towards scheme promoters was not addressed directly, focusing instead on general measures and a reduction in tax gaps.
Change Of Subject
Response accuracy