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News
Revenue news
Legal privilege
News
Revenue news
Legal privilege
Supplementary guidance on the disclosure of tax avoidance schemes has been issued by the Revenue on its website, following the amendments to the disclosure regulations after discussions with the Law Society of England and Wales on the scope of legal professional privilege. This is the subject of Mike Truman's comment, 'Levelling Down', at page 143 of this issue. The Government amended the regulations to remove any uncertainty that tax schemes marketed and designed by lawyers had to be disclosed.
The revised regulations mean that:
A lawyer who is unable to comply fully with the disclosure rules on the grounds that FA 2004, s 314 applies will not be a promoter in respect of those arrangements.
The client who uses the arrangements has to disclose them to the Avoidance Intelligence Unit within five days of the first transaction taking place unless there is another promoter who is liable to comply with the disclosure requirement.
Full details of the guidance are on the Revenue website or can be obtained from local tax offices.
(www.inlandrevenue.gov.uk)
Money laundering
The Inland Revenue strategy to tackle money laundering has been launched. The strategy sets out how the Inland Revenue will counter acts of money laundering predicated on tax evasion or offences against its other régimes.
In particular, professional advisers should note that in the document the Revenue says that it will: 'prosecute accountants, tax advisers and other professionals who assist their clients, or who act in their own capacity, to evade tax through means of money laundering activities.' The Revenue states further that it 'places great reliance on the integrity of these professionals' and that 'advisers who enable tax evasion offences are key to the success of these crimes'. Therefore 'it is appropriate for the revenue authorities to target them as "centres of infection"'.
The creation of the new joint Revenue and Customs department will mean that this strategy will need to be developed to take account of the far broader range of responsibilities in both departments currently. However, the principles in the document very much mirror the approach presently adopted by Customs in its efforts to counter money laundering in the régimes for which it is responsible. The integration of the department and the development of this strategy document will not affect the principles outlined here.
Similarly, from April 2005 there will be an independent office carrying out the prosecution of cases referred to it by the new department, HM Revenue and Customs (HMRC). The HMRC will not have a prosecution function of its own, rather the independent prosecution office will be the prosecuting body and it will be accountable to the Attorney General, rather than to Treasury ministers. The document will need to be updated in April 2005 to reflect these changes, but these do not affect the fundamental approach and principles currently outlined.
The strategy document can be found on the Revenue website at www.inlandrevenue.gov.uk/specialist/moneylaundering.htm or can be obtained from local tax offices.
(www.inlandrevenue.gov.uk)
Form 42
With the 30 November deadline approaching for submitting completed forms 42 and forms 42 (substitute), the Revenue has issued a reminder that the forms should be sent to: Share Schemes Team, Room 76, New Wing, Somerset House, London WC2R 1LB, and not to area offices.
(www.inlandrevenue.gov.uk)
Pensions online
The Government has announced that registered pension schemes will be required to send forms online and make electronic payments to the Inland Revenue from the start of the new simplified régime for taxation of pensions on 6 April 2006.
There are still a number of issues of detail on how precisely this can be achieved and the Revenue will be asking the pensions industry, software suppliers and other interested parties to work closely with it. To this end, it has published a short paper, 'Registered Pension Schemes — taking forward online services', outlining the key issues on its website at www.inland revenue.gov.ukpensionschemes/online-services.htm.
Anyone who wishes to be involved in the work on developing online services for pension schemes should contact: Inland Revenue, Pensions Simplification Online, Audit and Pension Schemes Services, Yorke House, Castle Meadow Road, Nottingham NG2 1BG, tel: 0115 974 2340, fax: 0115 974 1480, e-mail: pensionsconsult@ ir.gsi.gov.uk. The phrase 'response pensions online' should be in the subject line of e-mails or letters as well as an indication as to which work area or areas the respondent would like to work with the Revenue on.
Draft regulations to provide for online filing and electronic payment will be published early in 2005.
(Inland Revenue news release dated 2 November 2004.)
PAYE online
The Internet version of the Do it online: Online filing and electronic payment handbook has been updated and includes new and amended information about:
* testing returns;
* keeping PAYE records electronically;
* examples of excuses for not filing online and the Revenue's view of them;
* mending returns using online returns and forms.
(www.inlandrevenue.gov.uk)
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