'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 767.

    "710.dds-qd Instilling social responsibility in people."

    Does that include those who could work but choose to live off benefits instead?
    Tel - what,exactly, are the options, bearing in mind the paucity of jobs and the hyper inflated cost of accommodation?

  • rate this

    Comment number 766.

    However the HMRC pulled in £500mil extra tax by targetting plumbers, home tutors and ebay.
    Yes, targeting the small fish and ignoring the whoppers - doesn't make sense does it?

    Perhaps the HMRC Board Members were doing undercover work in Guernsey to trap the scammers and reel in some of the bigger players - yes, that would make sense now that I think about it.

  • rate this

    Comment number 765.

    Tax Avoidence.

    What type of person are we dealing here?

    Greedy? Selfish? A Cheat? A Liar?

    Of late all those traits that seem to be rewarded by our society

    Taking that into account do you honestly think a "Name and Shame" policy is going make one iota of difference to these people?

  • rate this

    Comment number 764.

    tax avoiders are like benefit cheats, both are taking money away from the exchequer, that cancer drug that can't be afforded, the hospital closure to save money, going to war to look big on the world stage. All these and many other things cost money which both cheats are costing. You have to wonder if people who bank in the cayman islands are amongst this lot though considering who might be guilty

  • rate this

    Comment number 763.

    Somehow I have the feeling Mr & Mrs average PAYE will be paying for this, perhaps do away with ISA's or remove tax relief on pensions.

    Tax avoidance by investing your savings abroad is a good move.

    Avoiding paying tax on income by working for and being paid by an offshore company should be illegal. Many companies offer this scheme to self employed, thousands if not millions are in these schemes.

  • rate this

    Comment number 762.

    Will this include George Robinson I ask, the biggest Tory donor or will it be like other policies - exception to the rule and how many others are involved?

    David Gauke said the UK had an excellent record on clamping down on avoidance schemes.... only when the cap fits David, only when the cap fits!

    Anymore lurking behind the skirting board?

  • rate this

    Comment number 761.

    Stop lecturing on morals and change the law and enforce it.

    Of course, if the government hadn't spend money it didn't have on PFI/PPP, air craft carriers, wars in the middle east, overtly generous pensions and severance payments, IT systems that don't work, quangos, consultants, MPs expenses and so on - it wouldn't be in the current mess it is!

  • rate this

    Comment number 760.


    Who are really the morally repugnant?

    People who call fraud, tax avoidance!

  • rate this

    Comment number 759.

    2 Minutes ago

    "It was a fair question given the comment it applied to, and I dont engage with bullies."

    You don't engage with bullies, seriously? You use a veiled slight to question my comprehension skills/intellegence and then when I bite back you have the audacity to accuse me of bullying? Have I stepped into a parallel universe? Is it opposite day today or something?

  • rate this

    Comment number 758.

    The UK government pays out £140 billion a year on benefits. How many really need it. There are jobs out there but most believe these jobs are beneath them so the immigrants get them. Yes some people do need benefits but not the 3rd generation bludgers or the girls that have children to increase their benefits or get a flat. Who are really the morally repugnant?

  • rate this

    Comment number 757.

    Yep I agree - Amazon/Facebook etc are one of the worst tax avoiders. However the HMRC pulled in £500mil extra tax by targetting plumbers, home tutors and ebay. They would get a lot more from cash in hand work. Most people in finance pay tax via PAYE so can't avoid tax. Except contractors of course. The real con is off shoring profits but it is highly regulated by the HMRC.

  • rate this

    Comment number 756.

    I don't give a monkeys whether we know who they are or not. The important thing to me is that the legislature knows who they are and should close the loop holes and better still stop them from doing it. It is the rhetoric and treating us as fools that get up our noses.

  • rate this

    Comment number 755.


    He voluntarily gave the information during a show, someone heckled him about his tax arrangements and he responded, "I only pay as much tax as I need to" I don't know what the Directives say about that, but I doubt he has a case.

  • rate this

    Comment number 754.

    It was a fair question given the comment it applied to, and I dont engage with bullies.

  • rate this

    Comment number 753.

    747.who2believe If they are public figures we will still not know who they are unless someone breaks the law and leaks the info.


    The EU Privacy Directive should have covered Jimmy Carr.
    What Jimmy Carr did in tax avoidance (noting this was a legal loop-hole) may have been immoral, but whoever spilled the beans may have broken the law.


  • rate this

    Comment number 752.

    By our taxation we are compelled to maintain our social responsibility to care for our neighbour. This should be a freewill option instead. We also are of the opinion that much of the tax money is wasted by the Government through self-indulgence. For your information Google “The World Monetary Order to Come”.

  • rate this

    Comment number 751.

    739. JasonEssex

    Have you ever paid a tradesman cash in hand? Or used Facebook/Amazon/Google? All of them are tax avoidance schemes.
    I've paid tips in cash - removal men as it happens.
    The consumer is not the problem here - you're using the twisted logic employed by the bank lobby.
    Access to the uk market and use of uk infrastructure gives Amazon unfair advantage over legit UK Co's

  • rate this

    Comment number 750.

    The only way to stop much of the avoidance of tax is to tax all forms of income, no matter how earn't, from this country, at source and then the individuals who claim they have payed too much tax can sort that out with the tax man at the end of the financial year, and that to apply to everybody no matter what they claim to be, NO exceptions! not even MP's and their expenses.

  • rate this

    Comment number 749.

    A friend worked for deportation, I assure you that many illegals do access the welfare system mainly via dodgy ID and passports. The system is also majorally open for abuse, its very easy to avoid being deported even with criminal convictions. And my point was you can't call someone racist because they believe immigration has screwed up this country.

  • rate this

    Comment number 748.

    And pigs might fly! There is about as much chance of this becoming a reality as there is Cameron denouncing Barlow for doing the self same thing!
    The rich have their snouts deeply in the trough, and lots of these will subscribe to the Cons, so it ain't going to happen.
    Notwithstanding that no doubt it will be against the Human Rights of anyone "outed".


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