UK tax authority proposes stricter regime Advisers who promote aggressive tax avoidance schemes to their clients could face fines of up to £1m under tough new proposals set out by the government this week. A consultation paper from HM Revenue & Customs (HMRC), Raising the Stakes on Tax Avoidance, outlines a number of ways in which the government plans to recover the £5bn lost each year to tax avoidance. It includes proposals to give HMRC new powers to extract early information from advisers and scheme promoters, and the ability to fine advisers up to £1m for failing to comply with requests, plus a penalty of £10,000 for each additional day that failure continues. Promoters who do not disclose the nature of tax schemes to advisers also face a £5,000 fine per adviser. David Gauke, the exchequer secretary to the Treasury, said: "HMRC is successful in more than 80 per cent of the avoidance cases it takes to court so we want to deter taxpayers from using these often unsuccessful schemes and ensure that they pay the tax that is due." Under the new plans, HMRC will be allowed to publicly identify the accountants and advisers it believes are behind the worst schemes, and will be able to seek information on such schemes in the early stages of marketing. "Last December, HMRC's "Closing in on tax evasion" document portrayed the promoters of avoidance schemes as "cowboy tax advisers." Now the "hands up" message has been reinforced by the publication of further documents," said Mike Down, head of tax risk at accountants Baker Tilly. But while he welcomed the proposals he also asked why HMRC had taken so long to suggest such rule changes. Whilst this cracking of the whip will be warmly received by the vast majority of tax advisers who do not support or market the use of contrived or abusive tax avoidance schemes, we wonder why it has taken HMRC so long to get to this stage? Others also questioned HMRC's timing. "This consultation is 10 years too late," said Adrian Cox, chairman of Rebus Investment Solutions. The fact is that the marketing of Unregulated Collective Investment Schemes (UCIS) - the umbrella under which most of these schemes fall - has been allowed to happen without the FSA [Financial Services Authority] being notified for the past decade. Rebus estimates that 120,000 investors have invested in between three to eight UCIS products. "When you consider that the FSA's own prediction is that 90 per cent of these investors should never have been shown these types of schemes, and that 70 per cent of those were actually mis-sold these schemes, it becomes clear how big an issue this is," said Mr Cox.