Published 7th December 2016
The Government pledged to tackle tax evasion and avoidance and support business through the tax system in yesterday’s Finance Bill. The Bill basically outlines draft tax legislation to back policies announced at the Budget 2016, Autumn Statement 2015 and Summer Budget 2015.
At the Autumn statement, the Government provided incentives to support and encourage business and the Finance Bill recommends further measures to tackle tax evasion, avoidance and aggressive tax planning by:
- preventing the use of disguised remuneration schemes which help people avoid National Insurance and income tax
- introducing a new penalty for those who enable the use of tax avoidance schemes that are later defeated by HMRC
- creating a new legal requirement to correct a past failure to pay UK tax on offshore accounts and investments with new sanctions for those who fail to do so
The Government is also looking to go further by consulting on a new requirement for the creators of offshore structures to register them with HMRC.
Finally, there are plans for measures to ensure that the tax base is sustainable and fair by updating the rules around how companies claim tax deductions for interest expenses and losses, and reforming the rules around salary sacrifice.
Jane Ellison, financial secretary to the Treasury, said: ‘We are recognised as having one of the world’s most effective tax regimes and this government is acting to ensure it continues to provide certainty for businesses, fairness for workers and a sound tax base to fund productivity boosting investment.
‘The UK is forecast to be the fastest growing major advanced economy in the world this year and we are making sure we are prepared to meet the challenges and seize the opportunities presented by Brexit.’
The consultation draft will run until 1 February 2017, with final details being confirmed in Budget 2017 and legislation introduced in the corresponding Finance Bill.
For a full version of the draft legislation visit http://bit.ly/2gYav4Y