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With HMRC cracking down on tax avoidance promoters, it has been suggested that more needs to be done to completely block them from supply chains.

The Association of Professional Staffing Companies (APSCo) and APSCo OutSource, have raised concerns over plans to implement tougher consequences for promoters of tax avoidance in its latest HMRC consultation submission.

The APSCo believes that HMRC’s planned measures to introduce a focused criminal offence for the continued promotion of a tax avoidance scheme covered by a Stop Notice just isn’t enough.

Tania Bowers, Global Public Policy Director at APSCo, explained, “While we welcome any plans to stamp out tax avoidance schemes in the recruitment supply chain, we believe that the current proposals are missing a few key elements, namely a focus on blocking promoters from the supply chain altogether.

“Unless the entire supply chain is notified then there is no way to stop the promoter offering adjunctive services, including legitimate activity. The communication needs to be widely publicised so that any party in a supply chain supplying a worker could undertake a simple compliance check.”

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Tania added, “The umbrella consultation now open with HMRC, HMT and DBT is important in this regard in terms of supply chain responsibilities.

“The proposals around enforcing criminal offences for the continued promotion of a scheme that is covered by a Stop Notice is unlikely to have a significant impact for a number of reasons.

“In the first instance, those who are engaged in this activity are unlikely to be deterred by this unless there is well-publicised enforcement. Secondly, it is highly likely that the speed of enforcement will also hinder success, with activity likely to have ceased by the time of enforcement of the criminal offence.

“With many promoters also likely to be operating overseas, cooperation with international tax authorities is also going to be required, but will create an additional layer of complexity.”

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