The measures include "naming and shaming" promoters of tax avoidance schemes and new financial disclosure agreements with the crown dependencies of Jersey, Guernsey and the Isle of Man. Banks will face the same fate from 2015 if they do not comply with the Code of Practice on Taxation for Banks.
The Government will also consult on how to collect tax debts through the Pay As You Earn system by "coding out" and changing individuals' tax codes. HM Revenue & Customs (HMRC) can already collect small underpayments in this way but the new system would allow greater range to increase the amount of tax debt collected.
Also among the measures was a tightening of the rules for companies that arrange loans, which do not attract tax, for their directors or shareholders in place of taxable salaries or dividends. HMRC has already identified three such loopholes.
The Chancellor is also scrutinising the misuse of partnerships in order to disguise what is really an employment relationship, and has opened up a consultation on the practice. Mr Osborne added that he would use next year's Finance Bill to remove loopholes allowing offshore intermediary companies to facilitate the avoidance of UK income tax and National Insurance Contributions, which the Treasury expects to raise around £340m over the next five years.
On the subject of tax avoidance, Mr Osborne has already been pushing through legislation that will introduce a so-called General Anti-Avoidance Rule (GAAR), which is designed as a catch-all measure to cover avoidance on schemes to exploit loopholes in taxes on income, corporate profits, capital gains, inheritance tax and stamp duty. It is thought that this will become law by the summer.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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