Tax disclosure rules 'could be tightened'

Date: 16th July 2009

HM Revenue & Customs (HMRC) has launched a new consultation, looking into whether or not its legal powers to get information on taxpayers who are using avoidance schemes should be expanded.

Small business owners who participate in these plans will face tighter disclosure requirements in future, if the proposals are adopted.

These new rules would be used by the taxation authority in cases where it needed to get information about an "unnamed taxpayer", where it is "not clear" who this individual is.

"A new specialist information power … would allow HMRC to issue a notice to the promoter of a disclosable avoidance scheme, requiring them to identify taxpayers to whom they have sold the scheme," the report stated.

"The power would be limited to promoters of disclosable schemes and the names and addresses of their clients. Any further information would have to be sought from the taxpayer by asking about their own tax position."

Responding, the Chartered Institute of Taxation said that HMRC's consultation was "surprising".

John Whiting, tax policy director at the organisation, told Accountancy Age: "This [proposal] is a little more specialist and needs more thinking."

The HMRC consultation will be open until October 1st.