Tax experts have warned that new proposals from the government to penalise so-called ‘enablers’ of tax avoidance schemes could have a negative effect on legitimate ways to receive advice.

Tax payments can often be a confusing area for many taxpayers and businesses. The Chartered Institute of Taxation (CIOT) has called for any penalties to be directed at parties looking to benefit from tax avoidance, rather than parties simply looking for advice on their tax situation from experts.

HMRC have proposed significant penalties for anyone found to be enabling a tax avoidance scheme. CIOT has pointed out however that the definition of what an enabler is could be vague, and there is a risk innocent parties could face problems when their original aim was simply to provide advice and support, rather than anything leading to an avoidance scheme.

“The Government needs to be careful that in its effort to wipe out avoidance schemes it does not prevent taxpayers from getting access to honest, impartial advice on the law,” said John Cullinane, CIOT’s Tax Policy Director. “It could be calamitous for businesses and other taxpayers if tax advisers (or their insurers) feel too anxious about the new sanctions to help them sensibly plan their tax affairs within the law and avoid these taxpayers laying themselves open to large, unintended tax bills.”