Accountants who advise people on how to avoid paying tax face tougher fines of up to 100% of the tax that was avoided, say the Treasury.
In a published consultation document, HM Revenue and Customs stated that the purpose of the penalty fines is to discourage those who help tax avoidance and put a stop to future behaviours.
The document also stated that everyone involved ‘in the supply chain’ of tax avoidance should be penalised when defeated by HMRC.
Currently, companies are subject to substantial costs when they are defeated in court, whilst advisers or accountants who assist the tax avoidance face very little risk.
Jane Ellison, the Financial Secretary to the Treasury, said: “People who peddle tax avoidance schemes deny the country of vital tax revenue and this government is determined to make sure they pay.
“The vast majority of their schemes don’t work and can land their users in court facing large tax bills and other costs.”
The government proposals mean that accountancy firms who have found to be helping clients avoid the payment of taxes will be just as responsible as companies.
Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers have been accused in the past by a report from the Commons public accounts committee of using Treasury knowledge to assist clients in dodging tax.
Recently, HMRC defeated a tax avoidance scheme used by major brewery Greene King and marketed by Ernst & Young, which saw £30 million of due taxes recovered from the brewery and others who used the scheme.
Ms. Ellison described the defeat, which happened earlier this month, as a “significant victory” and noted that the Treasury would not let such schemes go unchallenged.
The new proposals for tax avoidance fines are hoping to target these type of schemes as well as those who avoid tax through offshore accounts.