The Inland Revenue's move to force those who “devise and market” certain tax avoidance schemes to show the det-ails to the Revenue is unlikely to affect many IFAs, according to Towry Law product research manager Simon Farrant.
Farrant says the move is an “early warning system” for the Treasury and aimed at big accountancy firms. He says it will only affect IFAs linked with accountants which market these schemes or IFA arms of big accountancy practices.
The changes are part of the Revenue's Tackling Tax Avoidance measures, with the new rules requiring tax scheme promoters to provide details of “certain defined schemes and arrangements” to the Revenue shortly after the scheme is sold.
Details of when the rules are to come into effect are to be included in the Finance Bill.
Taxpayers using an offshore promoter or where the scheme is devised “in house” rather than bought through a promoter will have to provide details to the Revenue.
Farrant says: “The Treasury will have full details of each scheme and will know how to assess it and early on can go to ministers and say this is going to cost us £100m and have the loophole closed.”