The TaxPayers' Alliance pressure group said today's Government proposals to clamp down on the latest methods of tax avoidance are a "poor substitute for serious reform of the tax system."
Ministers need to be more realistic about HMRC's ability to clamp down when its resources are so stretched simply administering our hideously complicated taxes, let alone chasing those finding creative and legally dubious ways around them.
With a better tax system, HMRC staff can focus their attention on tackling those who are abusing the system. Proper reforms can ensure that everyone pays no more, and no less, than their fair share.
– Matthew Sinclair, director of the TaxPayers' Alliance pressure group
UK promoters will be made to hand over customer databases under the proposals, allowing HM Revenue and Customs (HMRC) to formally warn clients directly about the deals they have signed up to and to work out how much tax they owe if the scheme fails.
Under the reforms, which will go out to consultation, a promoter who has been penalised for not abiding by the rules will also have to provide extra information to HMRC on all of their schemes, not just the one they were reprimanded for.
Treasury Minister David Gauke will tell the Policy Exchange:
We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill.
These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence.
And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.