Clamping down on tax avoidance within the UK property market!

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mansion_2153481cNew regulations are aimed not only at tax avoiders but at schemes designed to get around the annual tax on enveloped dwellings. The introduction of regulations in April 2013, build on previous work from 2012. Putting an annual tax of £15,000 for a property valued between £2 million and £5 million and goes up to £140,000 for properties valued at over £20 million. Schemes designed and marketed to avoid paying this charge will now have to reported to HMRC. The Disclosure of Tax Avoidance Schemes (DOTAS) ensures details of schemes designed to provide users with an unfair tax advantage must be provided to HMRC, which in turn helps Government consider amendments to legislation. Penalties for not disclosing a scheme are up to £1 million and penalties for users failing to report the use of a scheme on a tax return are £100 for the first failure, £500 for the second and £1,000 for subsequent failures. Also promoters of avoidance schemes will now be forced to provide HMRC with details of their client’s national insurance number and unique taxpayer reference. Therefor making it easier for HMRC to track down avoiders and subsequently put them under investigation. Exchequer Secretary David Gauke said: ‘This Government has been clear – aggressive tax avoidance is unacceptable and will not be tolerated. HMRC has been well resourced to tackle tax avoidance and has made it clear that it will pursue those who attempt to avoid their responsibilities.’