IR35 and IR591 avoidance schemes to be hit in Budget
Accountancy firms will face severe penalties if they fail to disclose in advance to the Inland Revenue tax avoidance schemes sold to clients, under a crackdown to be brought in by Gordon Brown in tomorrow’s Budget.
The Times reports that Brown is understood to be ready to press ahead with a disclosure requirement which will force accountants to brief the tax authorities before offering any avoidance schemes to clients, such as those currently in place for IR35 avoidance, and similar schemes that will no doubt be set up to try to avoid IR591.
It is understood that the Treasury is working on a tough penalty regime for accountants who fail to advise the Revenue of schemes they have devised. This is in addition to the draconian penalties under the Money Laundering legislation which has applied to accountants since 1st March 2004. With tax evasion now classed as Money Laundering there is to be a huge disincentive for accountants to offer any avoidance schemes at all.
The US already operates a similar disclosure regime and is in the process of making its existing penalties for accountants who fail to comply with the rules even tougher.
More details will be announced in press releases after the Budget On Wednesday, but once again this amounts to a chilling warning that Brown wants to squeeze every last drop out of us.
