Accountants face fines in blitz on tax avoidance

AccountAnts who provide advice on how to avoid tax could have to pay a fine of up to 100 per cent of the amount that their customer escaped paying.

Ministers said they wanted to end the scandal of advisers who facilitate aggressive tax avoidance plans that are later ruled illegal escaping scot free.

currently, companies and individuals who avoid tax face but then lose their case to HM Revenue & customs in court face significant financial costs. But those who advised on, or facilitated, the avoidance scheme, some of which can cost the treasury millions of pounds, bear little risk.

Jane Ellison, the Financial secretary to the treasury, said last night that new rules would help reduce evasion by ‘targeting all those in the supply chain’ of such arrangements.

It is understood the new rules would allow the courts to fine accountants such as Ernst & Young, which designed an avoidance scheme used by Greene King. the brewer was told to pay back millions earlier this month.

But last night experts warned that the clampdown could target accountants providing routine and legal tax planning.

Miss Ellison said: ‘People who peddle tax avoidance schemes deny the country of vital revenue and this Government is determined to make sure they pay. these tough sanctions will make would-be enablers think twice.’

Last night Frank Haskew, head of the Institute of chartered Accountants’ tax faculty, warned: ‘the Government needs to ensure any new rules are properly targeted only to tackle those advisers that promote aggressive tax schemes rather than the vast majority of reputable advisers engaged in ordinary tax planning.

‘Anecdotal evidence suggests that many of these promoters are based offshore and operate outside of any regulatory framework, so actually hitting them with a penalty may prove more difficult.’