Rich? Famous? HMRC would like a quiet word

The Treasury today begins a consultation to thwart promoters of schemes that allow rich clients to avoid paying an estimated total of £4.5bn in tax every year.

Treasury Minister David Gauke, in a speech later today, is expected to compare scheme promoters to “rogue builders” and give HMRC the power to demand information from scheme promoters.

The Telegraph reported that Mr Gauke will tell the Policy Exchange thinktank that he wants to “make life difficult for those who artificially and aggressively reduce their tax bill.”

“These schemes damage our ability to fund public services,” he will reportedly say. “They harm businesses by distorting competition.”

Companies will be targeted

Companies using tax-avoidance schemes will be forced to provide details of celebrity and business clients under the Treasury’s plans.

HMRC will be allowed to contact rich beneficiaries directly to warn them of the financial cost of deliberately avoiding tax, but it is unclear how the crackdown will work as the schemes are legal.

Prime Minister David Cameron maintains the schemes are “morally” wrong, however.

Morally, if not legally, wrong

“Frankly some of these schemes where people are parking huge amounts of money offshore and taking loans back to minimise their tax rates, it is not morally acceptable,” Mr Cameron said last month.

Comedian Jimmy Carr apologised after he was criticised about “K2”, a legal scheme that allows its members to pay tax of as little as one per cent. Mr Carr, 39, is estimated to have used the scheme to shelter £3.3m a year. The scheme has 1,000 members, who in total were thought to have legally kept £168m offshore. Some members of the boy band Take That have also come under scrutiny.

Companies that fail to disclose tax-avoidance schemes may be “named and shamed” or fined.