FB 2018-19: rules on aggressive tax planning disclosure

Companies involved in aggressive, cross-border tax planning arrangements will be required to notify HMRC of those arrangements under new proposed legislation aimed at removing ‘secrecy’ around complex tax avoidance strategies

New legislation in the Finance Bill 2018-19 will introduce a power to enable the Treasury to enact regulations to require persons to notify certain cross border arrangements to HMRC.

The rules are part of international efforts to improve tax transparency and the Treasury says they will allow it to take ‘consistent action to tackle aggressive tax planning, avoidance and evasion’.

‘The UK government…has been at the forefront of the development of these new rules, working closely with other countries to ensure that they are well targeted and will be effective. The rules will make it harder for people to hide their money from HMRC to avoid or evade paying the tax that they owe, and will help HMRC to enforce existing law,’ said a government spokesperson.

‘The rules, when implemented, will give HMRC and other tax administrations access to early, useful information about taxpayers, intermediaries who provided services in connection with these arrangements, their activities in other countries, and the types of cross border arrangements that are entered into. The rules will help control and disrupt cross border tax avoidance and evasion which relies on secrecy.’

‘The power permits the regulations to require persons to notify information in a form and manner and at such intervals as are specified by the regulations, about arrangements entered into before the coming into force of the legislation, to modify existing legislation, to provide for penalties, and to make different provision for different purposes,’ say the government white paper outlining the legislation.

Until secondary legislation is implemented there will be no change to the law for individuals and businesses.

The new rules will come into effect if the Finance Bill 2018-19 is approved when it comes before Parliament in the autumn.

The policy paper, International Tax Enforcement disclosable arrangements is available here.

Report by Rob Munro

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