'Cowboy' tax advisers 'will be named and shamed'

Tax advisers who push the law to the limit with tax avoidance schemes will be named and shamed under a government crackdown.

Companies and tax advisers which use such systems will also be forced to reveal their list of clients by HM Revenue and Customs, minister said.

The public purse should be swelled by £5bn by the action, making up 14% of uncollected taxes, exchequer secretary David Gauke said.

Speaking to think-tank Policy Exchange, Gauke said it was galling for the hard working majority to see others shirk their civic duty by using aggressive tax avoidance schemes, especially when there is a need to cut the budget deficit.

Gauke’s comments came as the government launched a consultation paper on its planned reforms.

The minister said: “At a time of economic difficulty, when tough decisions have to be made on public spending and when the burden of taxation remains high, there is little sympathy for those who do not make their full contribution.

“For those who work hard and pay their taxes, it is galling to see others shirk their responsibilities on either front.”

There is a big difference between major accountancy firms which reduce their clients’ bills using legitimate means and rogue outfits which offer crude schemes to avoid liabilities, said Gauke.

ACCA head of taxation Chas Roy-Chowdhury said: “There badly needs to be more clarity and more simplification in the tax system from the top, so that the scope for taxpayers to engage in convoluted schemes which have no purpose other than to avoid tax is reduced as far as is practicable.

“David Gauke has acknowledged many of the concerns of the profession in his speech, and like ACCA, has looked at the historical perspective of tax planning. He has in particular accepted that the use of allowances and incentives in the right context and for the right reasons is a legitimate feature of the tax system and should remain so.”

Roy-Chowdhury continued: “He has also recognised that the majority of accountants perform a valuable role in ensuring that clients and employers understand their tax obligations and comply with them.

“We fully support the Treasury and HMRC in ensuring that individuals and companies do not abuse the tax system, but it needs to be a joint effort with all parties involved.

“ACCA believes that the long term solution to the issue of tax compliance lies in improving the structure of the tax system. For any tax system to be effective, it is important that tax payers and their advisers have certainty over how much tax they should pay.”

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