The UK’s largest independent trade association for accountancy providers and umbrella firms, the Freelancer & Contractor Services Association (FCSA), today welcomed a consultation document issued by HMRC which outlines plans to penalise accountants who help their clients to avoid tax. HMRC proposes fining advisors up to 100% of tax avoided which is in contrast to the current rules where only the clients face penalties and not the firms advising them.
HMRC is concerned that some accountants work with their clients to gain a tax advantage that Parliament never intended which according to published figures costs HMRC £3bn a year. Whilst welcoming the plans in principle, FCSA is concerned that some accountants and advisors could face fines even if the advice is not illegal, so care needs to be taken to target inappropriate behavior whilst not also capturing well-intentioned advisors.
Commenting on HMRC’s proposal, Julia Kermode, Chief Executive of FCSA said: “We do not condone any schemes that promote tax avoidance so we welcome today’s consultation. For too long unscrupulous advisors have been getting away with promoting tax avoidance schemes with no repercussions so we support the Government’s proposals to stamp out such unethical practices. People put their trust in their advisors and accountants to give them sound advice and rely on them to navigate the complexities of the legal tax system. However, I would like to fire a note of caution to HMRC that accountants could end up being penalised even if the advice given is not illegal. FCSA will be working closely with HMRC and policy makers to ensure that the new proposals are robust and avoid any unintended consequences.”