'Cowboy' tax scheme firms 'to disclose client lists'

David Gauke David Gauke said the UK had an excellent record on clamping down on avoidance schemes

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The government is promising to force "cowboy" financial firms to disclose the names of people using "aggressive" tax avoidance schemes.

Treasury minister David Gauke said such products were "repugnant" and unfairly penalised ordinary taxpayers.

The proposal is part of a government consultation on curbing avoidance.

Later, Mr Gauke said householders who paid tradesmen in cash were morally wrong as they were "facilitating the hidden economy".

Tuesday's Daily Telegraph quotes Mr Gauke as saying: "Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax.

"I think it is morally wrong. It is illegal for the plumber but it is pretty implicit in those circumstances that there is a reason why there is a discount for cash. That is a large part of the hidden economy."

Mr Gauke told Mondays BBC's Newsnight programme: "When a tradesman says 'here's a 10%, a 20% discount on your bill if you pay me cash in hand' that is... as a big a problem in terms of loss to the Exchequer as tax avoidance.

"Revenue is not being paid as it should be paid... If people do that, they have to do so with the recognition that it means taxes will be higher for the rest."

Last month Prime Minister David Cameron condemned the use by comedian Jimmy Carr of a Jersey-based scheme as "morally wrong".

That was one of a number of high-profile cases of people using financial loopholes to legally avoid large tax bills.

The Treasury estimates that 14% of all unpaid tax income is due to aggressive avoidance schemes, which are not illegal but are deemed unfairly to deprive the government of income.

The proposals include:

  • Measures to make finance companies disclose details of wealthy clients who take advantage of such schemes
  • Firms having to disclose how all their tax avoidance schemes work, not just the ones for which they are being criticised
  • Publishing warnings about tax avoidance schemes that are effectively being mis-sold, to make it easier for taxpayers to identify when they are on the receiving end of a hard sell by a disreputable promoter

They comes alongside plans to legislate to curb tax avoidance through a general anti-avoidance rule.

Companies could face fines of more than £1m if they flout the new rules.


Don't expect a list of avoiders to be pinned up on the door of your local tax office.

These proposals are aimed at giving HM Revenue and Customs more detail on the individuals using tax avoidance schemes, not as a public shaming exercise.

The tax authority will not publish people's confidential tax affairs.

It already receives a register - often populated by tax agents and company names using these legal schemes.

But, under these plans, HMRC will have a clearer sight of who it is dealing with if it decides to wrestle with the most "aggressive" schemes.

Mr Gauke acknowledged that tax avoidance - which is legal, unlike tax evasion - was difficult to define, adding that there was "always a barrier to be put up between unfairness and clarity".

He defined "aggressive" schemes as those which are "contrived" to defy the will of Parliament by depriving the government of expected revenues. He promised to "strengthen our description" of what constitutes tax avoidance to make schemes easier to control.

In a speech to the Policy Exchange think tank, Mr Gauke said HM Revenue and Customs already had an "excellent compliance record", adding: "We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill.

"These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence.

"And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride."

He promised to deal with "cowboy advisers", who devise and sell schemes to divert money away from the Exchequer.

Mr Gauke told the BBC News Channel: "This is a message to people who might be tempted by an unfair tax avoidance scheme: if something looks too good to be true, it probably is too good to be true.

"It's unfair because other taxpayers are having to pay more as a consequence... We want to nip it in the bud and ensure that people don't get engaged in aggressive tax avoidance schemes."

Mr Carr last month confirmed making a "terrible error of judgement" after it emerged he used a complex scheme to reduce his tax bill.


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  • rate this

    Comment number 127.

    David Gauke said the UK had an excellent record on clamping down on avoidance schemes. If that's the case why is this being discussed?

  • rate this

    Comment number 126.

    Tax avoidance or tax evasion?

    It would be much simpler for one and all if tax was applied on all earnings and monetary income, or on the value of non-cash benefits, no matter what the source, no matter where the source.

  • rate this

    Comment number 125.

    It's just hand waving and waffle. HMRC is snowed under with a backlog of work that'll keep it going well beyond the heat death of this universe. Tax laws have become more and more complex over the years to please corporations. A case of chickens coming home to roost. Simpler, clearer, laws would help a lot. The cleverest accountants don't work for HMRC.

  • rate this

    Comment number 124.

    There are just too many grey areas around tax avoidance and evasion, and there are too many people figuring out how far it is possible to push avoidance before it becomes evasion.

    A possible solution would be to switch the emphasis of tax law to let everybody know openly and honestly what you ARE allowed to do, like with an ISA, and if someone tries to do anything else that's illegal.

  • rate this

    Comment number 123.

    Let us go back to the idea of a 'Citizen'. As a citizen, you are entitled to a passport, to live here, to receive benefits, to vote, and to pay taxes. If you are non-resident, then you pay a fee for living here, but you aren't a citizen, and don't have those benefits, can't hold a title, vote, be in the H-of-L, or hold a UK passport. Simples.
    Also, the Home Sec can exclude non-citizens at-will.

  • rate this

    Comment number 122.

    "The government is promising to force "cowboy" financial firms to disclose the names of people using "aggressive" tax avoidance schemes."
    Tax avoidance is tax avoidance.
    I assume ministers will decide who is a "cowboy" and what is "aggressive". The question is: Will that decision be made in the interest of taxpayers, or in the interest of protecting the ID of themselves and their rich chums?

  • rate this

    Comment number 121.

    I can see the Government having to actually pay tax dodgers in compensation for 'Naming and Shaming' those who are doing something that is morally wrong, but not currently legally wrong.

  • rate this

    Comment number 120.


    You can buy gold without paying VAT.

    In what way is Gold not a luxury?

  • rate this

    Comment number 119.

    "Chris mather
    Who willingly pays more tax than the law requires?"

    Someone who uses technically legal means of turning income into a loan that never has to be repaid is deliberately circumventing the tax system. It means you and the rest of us pay more tax than we need to because some people use schemes we cannot use. Who wants to pay more tax than they need to because of such people?

  • rate this

    Comment number 118.

    Naming and shaming the major tax dodging coporations is a great idea, plus setting what they have cheated us of against an idea of the good that money could have done: built 3 hospitals, financed anti-malaria drugs for X millions poor people etc. Also licencing accountants and then withdrawing licences from those aiding and abetting the tax dodgers. Come on government, get them.

  • rate this

    Comment number 117.

    So DC want to name and shame are these list going to be open to read or redacted were DC friends are mentioned
    It should be that person or company that earns it's money pays UK tax if a loan is received from outside the UK that loan Payment is not counted as a out going but as a wage paid to some one working for the company it should be taxed at PAYE rates

  • rate this

    Comment number 116.

    Dont shake the box to hard Dave you may find an awful lot of MPs fall out of it(silly me they would not be dishonest would they!!!!!!!!)

  • rate this

    Comment number 115.

    Anyone whose average tax rate (on income over basic personal allowance) is less than the rate of tax for that income slice should have their full details published on line, including their full address and complete property ownership, wealth and income.

    There must be CONSEQUENCES for not being on of us!

    Public disgrace should be the starting point!

    This should be part of the equality agenda.

  • rate this

    Comment number 114.

    Absolute outrage. If it is avoidance it is not illeagal so why on earth are they being "exposed". If the government doesn't like it then change the law; this govt has had ample opportunity to reduce loopholes in the system (often provided to benefit special interest groups such as the pandered to UK film industry) but has done little to improve or simplify taxation.

  • Comment number 113.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 112.

    British Territories of any sort should not be allowed to be used as 'tax havens' period. If you want the 'protection' afforded by being British you pay into the system. Sure many locations would face economic hardship for a time, but there is always tourism, or drugs running that most of these locations are already involved in. If we close down the loopholes the 'scum' will go somewhere easier.

  • rate this

    Comment number 111.

    Another smoke screen. A few 'celebrities' who use loopholes will be named and shamed but it's just a scam to try and divert attention from this Gov's ineptitude and inability to legislate to remove the loopholes.

  • rate this

    Comment number 110.

    Typical of the Govt!. Let's not introduce legislation to ensure tax loopholes are closed but tell the avoiders they are naughty. Oh and make sure they are not Tory supporters/donors only Labour. Meanwhile let us continue to employ, on secondment, accountants from the big tax avoidance firms to help us write legislation(This happens!!)

  • rate this

    Comment number 109.

    70.These people probably have private health care in with their salary package,aswell bonuses for failure. It has been clear for yrs that the bonus system does not work. Look at the ombudsman legal & financial,Independant assessors, yet why are they not responsible to FSA . Seems to me its making jobs for the sake of it. Way past time it was salary only, pay rise if work good, pay loss otherwise

  • rate this

    Comment number 108.

    Nothing new here - under the general anti-avoidance provisions promoters already have to disclose schemes that have certain 'hallmarks'. Who really cares if it's wrong morally - if it's not against the law then the Governmenmt can't complain. They can always change the law! Simples


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