Penalties for enablers of defeated tax avoidance schemes
Penalties for enablers of defeated tax avoidance schemes

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Penalties for enablers of defeated tax avoidance schemes
  • When are the rules in effect?
  • When is a penalty payable?
  • Meaning of key concepts
  • Meaning of ‘defeat’
  • Who is an enabler?
  • An enabler is a designer of arrangements
  • An enabler is a manager of arrangements
  • An enabler is a marketer of arrangements
  • An enabler is an enabling participant
  • More...

FORTHCOMING CHANGE: As announced at Spring Budget 2020 on 11 March 2020, the government is taking forward further measures to reduce the scope for promoters to market tax avoidance schemes, including by way of changes to the regime for enablers of tax avoidance schemes. Draft legislation was published on 21 July 2020, to be included in Finance Bill 2020–21 and to take effect following Royal Assent. For further information, see News Analysis: Draft Finance Bill 2020–21—Private Client analysis — Promoters and enablers of tax avoidance schemes.

The imposition of penalties on enablers of defeated tax avoidance schemes is designed to prevent and discourage designers, marketers and facilitators of abusive tax avoidance schemes and arrangements.

The introduction of this legislation is part of a broader government drive over a number of years to eliminate tax evasion and aggressive tax planning. Further initiatives in this area include the general anti-abuse rule (GAAR), issuing promoters of tax avoidance schemes (POTAS) with conduct notices, the imposition of criminal offences on offshore tax evaders and the introduction of a revised version of the Professional Conduct in Relation to Taxation guidance (see General principles of tax avoidance—Private Client—overview for further information).

The purpose of this penalty regime is to influence the behaviour of enablers of tax avoidance, and discourage them from designing, marketing and facilitating avoidance generally. The government has sought to target

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