'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 547.

    funny a documentry the other night revealed
    members of the board of HMRC
    who were employed to stop avoidance schemes
    were infact on the board of large companies advicing tem how to avod

  • rate this

    Comment number 546.

    It is the governments job to have proper rules enabling it to collect taxes.
    Naming and shaming is missing the point, it the government was doing its job properly, there would be no legal but immoral tax avoidance schemes

  • rate this

    Comment number 545.

    Treasury minister David Gauke said such products were "repugnant" and unfairly penalised ordinary taxpayers. Last month Prime Minister David Cameron condemned the use by comedian Jimmy Carr of a Jersey-based scheme as "morally wrong". THEY still of course employ the same tactics to deprive pensioners living in commonwealth countries of there fair pension.

  • rate this

    Comment number 544.

    Personally I can't see many public sector workers opting for Ltd.Co. as they would lose their gold plated pensions.
    Well, I don't know ...there's masses of scope for creating artificial entities to 'share' your tax burden, I mean profits, with.And of course we all know about 'expenses'.

    Private sector pensions are definitely a joke though - still if that helps boost profits/bonuses

  • rate this

    Comment number 543.

    526. Bobman
    in fact the car would cost a fortune in tax

    As much as it would cost me to buy it with money that I have already paid income tax on? I doubt it somehow.

  • rate this

    Comment number 542.

    Rather than naming and shaming those who......actually they haven't broken any laws at all?
    Why not change the law? I believe the government is allowed to do that...although we might need to check with Brussels first!

  • Comment number 541.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 540.

    It's not schemes for avoiding tax that are wrong, it is the taxation- process itself. Government informs an individual of how much it will steal from his earnings. That amount is determined by labyrinthine rules so complex that there are experts required for their interpretation. Citizens have no influence over how the money should be spent and unclear information on how it was spent.

  • rate this

    Comment number 539.

    533. beebalert
    The government have totally lost credibility in the eyes of the people, if they want some back they need to get on with it.

    Really, you think that this government is not already past the point of ever having credibility??

  • rate this

    Comment number 538.

    As taxavoidance schemes are legal, what right does the government have to publish names as they see fit.

    HMRC has an obligation to protect taxpayers information and would surely be in breach of the data protection act if they published such information.

    Additionaly the tax one pays (or doesn't pay) is a private matter. Would publication breach the Human Rights Act by "naming and shaming"

  • rate this

    Comment number 537.

    503.Total Mass Retain
    To a certain extent i agree with you, but if people have used legal means to reduce their tax bill, then mostly my antipathy is focussed ont he politicans who wont sit down and sort out a simpler, less loopholed tax alw that makes the large scale tax avoidance either impossible or nto worth it. We can only hope...

  • rate this

    Comment number 536.

    I don't think the people should be 'outed' because they're not doing anything illegal. If it's morally wrong then maybe it should be illegal and then there's a case to answer. US Citizens are liable for tax on earnings abroad whereas UK Citizens can 'escape' tax if they stay outside the UK. This would capture income tax from mega rich 'stars' that live in the US.

  • rate this

    Comment number 535.

    "Nemesis of Socialism is Nigh
    there's a Hugh number of ''Entitled'' in the U.K. who fully believe that it is there right to demand that the HIGHEST possible amount of Tax is taken off you."

    It seems to be "Adam" and you who are arguing that the majority should pay more taxes so that the very wealthy can pay low or no tax.

    I'd suspect you were "nieuw divil" were it not for the poor grammar.

  • rate this

    Comment number 534.

    I hope it is all back dated at least 20 years. We need the money for smoking cessation and climate change officers in the councils.

  • rate this

    Comment number 533.

    It can only be a good thing that these snakes are revealed but more needs to be done. A million pound fine isn't even remotely close to being large enough and all of the legal loopholes need to be closed just as aggressively as they're being taken advantage of. The government have totally lost credibility in the eyes of the people, if they want some back they need to get on with it.

  • rate this

    Comment number 532.

    Name and shame, and then what? Nothing - unless you are a small person with a small amount of evaded tax, in which case you will probably feel the full force of the law. It's the rich what gets the pleasure and the poor what pays the price.

  • rate this

    Comment number 531.

    "Nemesis of Socialism is Nigh
    Sadly Adam there's a Hugh number of ''Entitled'' in the U.K. who fully believe that it is there right to demand that the HIGHEST possible amount of Tax is taken off you."

    Well, I'm not one of them. Merely someone who believes we should all pay the taxes decided via our democratically decided processes: no more no less. Why do you disagree with that?

  • rate this

    Comment number 530.

    It would be very interesting to see if any people in a position of power to stop these 'tax havens' are actually using them! It usually is the case and given the recent errors of judgement regarding, for example, the politician's finances, it wouldn't be a surprise to see a few MP's named and shamed!! Hooray for Taxes!

  • rate this

    Comment number 529.

    take that!


  • rate this

    Comment number 528.

    I think most people would admit that the top people in society should have high salaries that should be taxed at a fair rate. However that should NOT mean also having the legality to hide vast wealth in tax havens. I always thought REAL leadership and morality and CHANGE came from example...at the Top. So why is this not happening. Maybe this why Britain is Broken.


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