View more on these topics

BUDGET 2010: Tax avoidance move puts burden on IFAs

Experts have warned that the Government’s tougher disclosure obligations on tax avoidance schemes will put increased requirements on IFAs and will be difficult to police.

In the Budget, the Government announced a significant package of measures to combat tax avoidance through the revision of its current disclosure of tax avoidance scheme legislation.

New measures include a requirement for promoters to provide lists of clients that they have provided the schemes to and increased penalties for those who fail to comply with the disclosure rules.

The Government is extending the “hallmarks” for which avoidance schemes require disclosure to include schemes that involve employee remuneration and those designed to convert inc-ome into capital. It is also bringing forward the timeframe within which disclosure of a scheme is required.

Trust and estate practitioner Paul Willans says that what may appear to be relatively straightforward planning could now fall under the new rules due to the extension in hallmarks.

Willans says: “They are trying to obtain notice of these sch-emes at the earliest opportunity so that they can put in place spoiling regulations.
“Whereas in the past, the IFA could rely on the promoter to notify HMRC, they now have an obligation to advise them of the promoters who are either coming up with planning ideas or the products. This is a new requirement and one which could be quite significant and Draconian.”

Syndaxi Chartered Financial Planners managing director Robert Reid says the new measures will be very difficult to put into practice. He says: “It could be a data protection nightmare for promoters to provide a list of clients.

“You could be promoting schemes to lots of people who do not take them up. Is it right for you to pass out details of those people? It is a bit like holding DNA for people who did not commit a criminal act.”


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. Incompetent Regulators Awards Team 26th March 2010 at 10:43 am

    Weel it looks as is if all my clients who contributed to pensions are in for a hit and I may be out of business then.

    Aren’t Labour really a clever bunch?

  2. Incompetent Regulators Awards Team 26th March 2010 at 10:46 am

    Well it looks as if all my clinets who put money into pensions are in for a hit then. In the meantime I’m in the firing line for selling a good old fashioned pension scheme! Clever bunch New Labour are aren’t they?

  3. Nemo of the Caribbean 27th March 2010 at 1:12 am

    What utter stupidity! The smart IFA’s will just refer clients who require tax planning to offshore advisers in jurisdictions where English Law has no power. HMRC will then not only lose the opportunity to steal the money of such clients’ but will also lose the tax on the IFA’s profits from advising them. One has to ask; has Darling just not noticed that high net worth people have phones, Internet and access to airports or is he just competing for some kind of mental retardation award? Geoff Hoon is winning at the moment, by the way – you need to outlaw chocolate to catch up – preferably using taxicabs to confiscate it.

  4. It is very simple- as we have been doing for many years since 1997. We no longer deal in tax avoidance schemes in the UK- instead inquiries are passed on to an overseas company. We do not ask the name of the inquirer & basically have done no tax avoidance business since 1997. Therefore we have never sneaked on our clients as we are not in business to do so. It is our duty to protect them. Tax mitigation is Legal…
    evasion is not. See our website
    The main concern we have is that HMRC presumes intention of tax avoidance without proof even though Justice Wilberforce stated clearly in the case of Furniss v Dawson that under the law presumption can not be used.
    Established 1966
    Drummond & Co
    0870 794 2180

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm