An MP has filed a motion to review the tax treatment of those who HM Revenue & Customs have challenged over the use of an avoidance scheme.
Greg Mulholland, MP for Leeds North West, claimed that it should be the manager or provider of such schemes which should be found liable, rather than the taxpayer.
He said the taxpayer should be treated as though they have been mis-sold the avoidance scheme.
Mr Mulholland argued that those running the scheme often make “huge amounts” of financial gain, while the individual taxpayer makes very little, or, in some cases, loses capital as a result of the scheme.
“As a result of HMRC’s unfair pursuit of these victims, they are facing huge tax bills and are facing potential bankruptcy and homelessness,” he said in his early day motion.
“HMRC is pursuing the victims and in many cases are not pursuing or even properly investigating the perpetrators of the fraud who have deliberately abused the tax system.”
The MP called on the Government to amend legislation to introduce a tax exemption for “victims of fraud” in respect of tax liabilities that have arisen as a result of a mis-sold tax avoidance scheme.
Experts were quick to point out that the proposed motion is unlikely to pass through Parliament before June’s snap election.
The early day motion can be found here.