Tax avoiders face upfront fines in HMRC crackdown

Risky tax avoidance schemes could be listed and their users forced to pay disputed tax upfront under proposals by Her Majesty’s Revenue and Customs (HMRC).

Currently, HMRC only gives suggestions of the types of tax schemes it is likely to challenge in its online consumer publication Spotlight.

If a scheme is challenged, HMRC can only reclaim the tax avoided after proving the scheme is illegal, which can often take several years.

Under the new proposals, specific schemes HMRC believes are "aggressive" and being used inappropriately will be listed in regulations.

Anyone found to be using the schemes will have to pay the tax avoided upfront, plus an extra charge on that tax.

The responsibility to declare use of such schemes would shift to the user themselves under new proposals.

The consultation on the proposals opened today and will close on 31 August 2011.